Document Type : Research Paper
Authors
1 Faculty Member of the Department of Economics, Faculty of Humanities, Ayatollah Boroujerdi University, Boroujerd, Iran.
2 PhD student in Economics, Social Sciences and Economics Faculty, Alzahra University, Tehran, Iran.
Abstract
This study aims to investigate the threshold effect of FinTech on the oil rent–growth nexus in Iran. The threshold regression approach and seasonal data for 2013-2022 were used to analyze the relationships among variables. Results indicate that oil rent has a significant and negative impact on economic growth both before and after FinTech reaches its threshold level of 0.146. However, once FinTech surpasses this threshold, the intensity of the resource curse's effect on economic growth diminishes. Additionally, the interaction effect between oil rent and FinTech has a significant and negative effect on economic growth before FinTech reaches the threshold, but after surpassing the threshold, the interaction effect of oil rent and FinTech on economic growth is significant and positive. Inefficient use of oil revenue through increased rent and corruption reduces economic growth. However, the expansion of FinTech, using digital technologies, increases the access of non-oil sector firms and entrepreneurs to financial services, which in turn leads to an increase in employment and a decrease in the pivotal role of oil in the economy. Therefore, fintech development reduces the negative impact of oil rents on economic growth. Accordingly, it is recommended that government, by developing FinTech platforms and blockchain technologies, in addition to further monitoring the allocation of oil revenues to the country's public budget, facilitate access to capital for entrepreneurs and small businesses active in the high technology sector, and reduce negative effects of oil rent on economic growth through optimal resource management and balanced development of various production sectors.
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