Role of digital finance, investment, and trade in technological progress

The primary purpose of this study is to evaluate the impacts of digital finance, trade, and investment on technological progress in 30 developing Asian economies by employing the FMOLS (Fully Modified OLS) technique and annual data from 2000 to 2020. The findings concluded that digital finance has a positive impact on technology progress. Moreover, trade liberalization may accelerate technological progress. Foreign direct investment has no significant coefficient, interpreting that inward FDI (Foreign Direct Investment) to the examined developing Asian economies is unrelated to technological progress. The causality test confirmed a neutrality hypothesis for the causal relationship between FDI and technological progress. Furthermore, the bidirectional linkage between trade openness and technological progress is confirmed. The paper recommends that developing economies increase the share of investment in technological progress, prioritization of regionalism and trade multilateralism for technology transfer, and establishment of a "digital financial inclusion" framework.