Financial Digital Synergy in OECD Economies Panel PMG ARDL Analysis
Abstract
This study investigates the interplay between the digital economy and financial development across 13 OECD countries over the period 1995–2019. Using a Panel PMG-ARDL approach, we find a robust long-run relationship between the digital economy and financial development, affirming the potential of digital technologies to contribute to financial prosperity. The findings are also confirmed by the Fully Modified Ordinary Least Squares (FMOLS), Dynamic Ordinary Least Squares (DOLS), and Canonical Cointegrating Regression (CCR) methods. Furthermore, the Dumitrescu-Hurlin Panel Non-Causality test reveals a bidirectional causality between the variables of interest. The study suggests a need to invest in digital infra-structure and technologies to enhance the development of financial institutions and markets in the context of their efficiency, depth and access.