The impact of FinTech on economic growth in Türkiye - A novel FinTech index approach

Oct 23, 2026

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This study explores how FinTech developments affect Türkiye’s economic growth from 2012:Q2 to 2024:Q1. FinTech can deliver faster, cheaper, and more flexible financial services, yet its rapid evolution may create risks such as economic instability and limits on growth through digital credit and speculative investment. A PCA-based FinTech index with eight variables is used, while ARDL bounds testing and robustness checks (FMOLS, DOLS, CCR) support the results. Findings indicate long-run linkage with bidirectional causality, alongside a dampening effect of FinTech on growth.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages26

Reading Time1 h 6 min

AccessFree to download

Abstract

1. Introduction

| | Journal of Economics and Management
e-ISSN 2719-9975 ISSN 1732-1948 Vol. 47 􀁸 2025 | | --- | --- | Ömer Faruk Kömürcüoğlu [https://orcid.org/0000-0002-8399-5597](https://orcid.org/0000-0002-8399-5597) Independent Researcher, Trabzon, Turkey [ofkomurcuoglu@gmail.com](ofkomurcuoglu@gmail.com) The impact ofFinTech on economic growth in Türkiye: A novel FinTech index approach Accepted by Editor Ewa W. Ziemba | Received: January 22, 2025 | Revised: April 20, 2025; July 1, 2025 | Accepted: September 8, 2025 | Published: October 13, 2025. © 2025 Author(s). This article is licensed under the Creative Commons Attribution-NonCommercial 4.0 license ([https://creativecommons.org/licenses/by-nc/4.0/](https://creativecommons.org/licenses/by-nc/4.0/)) Abstract Aim/purpose – This study aims to explore the impact ofFinTech developments on Türkiye’s economic growth from 2012:Q2 to 2024:Q1 . While FinTech offers faster, cheaper, and more flexible financial services, its rapid evolution may pose risks, such as economic instability and growth limitations, stemming from digital credit and speculative investments. Design/methodology/approach – An index representing FinTech developments is constructed using the PCA method, incorporating eight distinct variables. Gross fixed capital formation, labor force, government expenditure, and inflation are included as control variables. The study employs the ARDL bounds testing approach to examine long-run relationships, and robustness checks are performed using FMOLS, DOLS, and CCR methods. Finally, causality relationships are investigated using the Toda–Yamamoto test. Findings – The analysis reveals that FinTech developments and economic growth are closely linked in the long run, exhibiting a strong bidirectional causality relationship. However, FinTech has a dampening effect on economic growth, emphasizing its disruptive potential in Türkiye. These findings are consistent across alternative estimation methods. Research implications/limitations – The study highlights the importance of regulating FinTech innovations to mitigate their adverse effects on economic stability. However, the research faces limitations, including the lack of comprehensive data that better captures the FinTech ecosystem and the inability to use panel data due to the single-country focus. Future studies could address these limitations by incorporating richer datasets or conducting cross-country analyses for broader insights. Originality/value/contribution – This research contributes to the literature by developing a unique FinTech index and providing empirical evidence on its impact on economic growth in a developing economy. It underscores the critical role of effective regulation and the development of an inclusive financial ecosystem in ensuring sustainable growth. Keywords: financial technology, FinTech, economic growth, ARDL. JEL Classification: G00, O40, C22 . 1. Introduction The term financial technology (FinTech) encompasses a network of start-upsand innovations that heavily rely on technology in the financial services sector (Arner et al., 2015) . FinTech has become increasingly prominent in the postGlobal Financial Crisis (GFC) period, and interest in this concept is growing daily within the academic community (International Monetary Fund [IMF], 2018) . Although the concept of “FinTech” emerged conceptually in the post--GFC period, the combination of the terms “finance” and “technology” and the meaning it conveys has a notable historical background. According to the taxonomy developed by Arner et al. (2017), the historical roots of finance and technology interaction can be traced back to the 19th century. FinTech developments can be examined in three different periods. In 1866, the introduction of transatlantic cables connecting two continents marked the beginning of the FinTech 1.0 era. The use of credit cards and the subsequent introduction of automated teller machines (ATMs), which re

FAQs

What period and research focus does the study examine?

The study analyzes the impact of FinTech developments on Türkiye’s economic growth from 2012:Q2 to 2024:Q1, focusing on both potential benefits and risks from digital finance.

How is the FinTech development index constructed?

An index is built using the PCA method with eight distinct variables, and control variables include gross fixed capital formation, labor force, government expenditure, and inflation.

What do the empirical results show about the relationship between FinTech and economic growth?

FinTech developments and economic growth are strongly linked in the long run and show a strong bidirectional causality relationship, but FinTech also has a dampening effect on economic growth.

Oct 23, 2026

Upload by jayni