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The rise of fintech is revolutionizing the financial landscape, with products and companies advancing innovative technologies to improve and automate financial services. In this paper, I use a novel dataset and implement a dynamic modelling to investigate the relationship between fintech and economic growth in a panel of 198 countries over the period 2012–2020. This cross-country approach—utilizing direct measures of fintech and dealing with potential endogeneity—provides interesting empirical insights. First, the impact magnitude and statistical significance of fintech on real GDP per capita growth depend on the type of instrument (digital lending vs. digital capital raising). While digital lending has a statistically significant positive effect on economic growth, digital capital raising has a large but insignificant effect. Second, the overall impact of fintech including all instruments is positive and statistically significant because of the overwhelming share of digital lending in total. Finally, while the positive relationship between fintech and growth is stronger in magnitude in advanced economies, the statistical significance of this effect is higher in developing countries. Taken as a whole, these results confirm Schumpeter’s prediction that financial innovation can promote growth, but not every type of fintech becomes an accelerator.

Aggregate Productivity --- Asymmetric and Private Information --- Banks --- Capacity --- Capital --- Corporate Finance and Governance --- Cross-Country Output Convergence --- Currency crises --- Depository Institutions --- Digital financial services --- Economic & financial crises & disasters --- Economic Development: Financial Markets --- Economics of specific sectors --- Economics --- Economics: General --- Finance --- Finance: General --- Financial Markets and the Macroeconomy --- Financial markets --- Financial sector development --- Financial services industry --- Financial technology (fintech) --- Fintech --- Government and the Monetary System --- Gross fixed investment --- Industries: Financial Services --- Informal sector --- Intangible Capital --- International Financial Markets --- Investment --- Investments: General --- Macroeconomics --- Measurement of Economic Growth --- Micro Finance Institutions --- Monetary Systems --- Mortgages --- National accounts --- One, Two, and Multisector Growth Models --- Payment Systems --- Regimes --- Saving and Capital Investment --- Saving and investment --- Standards --- Technological innovations --- Technology