Institutional and Technological Fintech Drivers: Cross-country Study

The paper research institutional and technological drivers of fintech growth and development. Understanding of these drivers is important for policy makers and future trends prediction. Previous research on non-regulatory institutional factors is limited in terms geography or fintech aspects. We attempt to contribute to knowledge on how institutional drivers affect different aspect of fintech development. We use two different institutional frameworks developed by World Economic Forum and World Bank to assess institutional factors on country level. We build several different datasets, combining multiple sources of data, covering up to 120 countries and 8 years period. By using panel regression with time and entity fixed effects and gradient boosting regression we attempt to empirically evaluate effects of institutional drivers on mobile money, fintech credit, fintech companies and equity investment in fintech on country level. Our research suggest that some institutional factors affect the fintech development and growth, the effect can be positive and negative. However, we find this effect to be inconsistent across different fintech sectors and variable importance to be low relative to other factors as ICT use, GDP per capita and population. Our empirical findings support theory of major variations in key institutional fintech drivers across countries.