Relationship between covid-19, digital financial services and economic growth: evidence from panel data

The emergence of the novel coronavirus-2019 (COVID-19) has led to lifestyle changes for the entire world population. Stringent regulations imposed to curb the pandemic left no other choice for the world population except to adapt to the new way of living. One significant impact of this pandemic is the increased use of digital financial services. This study examines the relationship between COVID-19, digital financial services, and economic growth. The study examines the impact of digital financial services on economic growth in 39 Asia countries from 2017 until 2021. This study uses panel data analysis to achieve the objective. The independent variables, which are also the proxies for digital financial services, include digital commerce, digital remittance, and mobile point–of–sale payment. In addition, the independent variables also include internet users, population, consumer price index and a dummy variable of COVID-19. The dependent variable is the annual gross domestic product of selected countries. Findings show a significant relationship between digital commerce, digital remittance, mobile point–of–payment, internet users, population, consumer price index, COVID-19, and gross domestic product. Consistent with past studies, digital commerce, digital remittance, internet users, consumer price index, and COVID-19 show statistically significant positive results. On the contrary, mobile point-of-sale payment and population exhibit a negative relationship with the gross domestic product. These results do not align with past studies that reveal a positive relationship. The implication of this study is that each respective country's policymakers need to act proactively to strengthen the legal framework in enhancing the use and efficiency of digital financial services.