Revolutionizing finance: The synergy of fintech, digital adoption, and innovation

Amidst the transformative digital age, characterized by groundbreaking innovations and digital integration, this study makes an attempt to explore the multipronged connection between innovation, digital adoption, and fintech. The study employs novel and comprehensive indices, such as the Global Innovation Index, Digital Adoption Index, and the Global FinTech Index to provide a deeper understanding of the intricate relationship between these variables. Through robust exploratory data analysis (EDA), Principal Component Analysis (PCA), and log-linear cross-sectional regressions, the study identifies a strong association of these variables with the income and geographical positioning of the countries and that many themes of digital adoption and innovation are highly complementing in nature. The study also uncovers the bidirectional causality between innovation and digital adoption. However, the linkage of fintech development with these dimensions is less pronounced, particularly when accounting for control variables. Collectively, this research highlights the complexity of these associations in the financial ecosystem, emphasizing their significance for policymaking and fostering economic growth via innovation-driven fintech integration.