Article

Panel Quantile Regression Analysis of FinTech Credit Growth and Its Asymmetric Effects on Digital Economy Indicators under Financial Stress  

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Abstract

This study investigates the heterogeneous and stress-contingent effects of FinTech credit growth on digital economy performance using a panel quantile regression framework. Drawing on a cross-country panel dataset covering multiple years, the analysis moves beyond conventional mean-based estimators to capture distributional asymmetries across digitally constrained, emerging, and digitally mature economies. The results reveal substantial heterogeneity in FinTech credit effectiveness: FinTech credit growth exhibits weak and statistically insignificant effects in the lower quantiles of the digital economy distribution, reaches its strongest and most robust impact around the conditional median, and displays diminishing marginal returns at the upper quantiles. These findings indicate that FinTech credit functions as a conditional accelerator rather than a universal driver of digital economic development. The study further demonstrates that financial stress fundamentally reshapes FinTech credit transmission mechanisms. Under high-stress conditions, the marginal contribution of FinTech credit growth declines sharply, particularly in lower-tail economies where its effect nearly collapses. In contrast, upper-quantile economies retain positive, though attenuated, FinTech effects, reflecting higher institutional resilience and digital maturity. Stress-conditioned estimates consistently show that financial stress amplifies digital divergence by disproportionately weakening FinTech credit effectiveness in vulnerable economies. Robustness checks using alternative stress proxies, lagged credit specifications, balanced-panel subsamples, and bootstrap inference confirm the stability of these asymmetric patterns. Overall, the findings provide new empirical evidence that FinTech credit expansion alone is insufficient to guarantee inclusive digital transformation, especially during periods of financial instability. The study contributes to the FinTech and digital economy literature by integrating distributional econometrics and financial stress analysis, offering policy-relevant insights into how FinTech credit can both support and hinder digital development depending on structural conditions and macro-financial regimes.

Keywords: FinTech credit, digital economy, financial stress, panel quantile regression, asymmetric effects, digital inequality

How to Cite:

Alhebi, M. A. & Assiri, M. K., (2025) “Panel Quantile Regression Analysis of FinTech Credit Growth and Its Asymmetric Effects on Digital Economy Indicators under Financial Stress  ”, FinTech Innovation Journal 1(3), 286-308. doi: https://doi.org/10.63913/ftij.v1i3.92