Southeast Asia's geopolitical risk and financial inclusion: The moderating effect of fintech development and climate risk

Abstract

From 2011 to 2021, this study looks at how financial inclusion (FI) is affected by geopolitical risk (GPR) in five Southeast Asian nations: Vietnam, Thailand, Malaysia, the Philippines, and Indonesia. It also looks into the moderating effects of climate risk and fintech spending on this connection. The results demonstrates a substantial negative correlation between GPR and FI, which is addressed by using an instrumental variable probit (IVProbit) model to address endogeneity problems. Additionally, while climate risk increases the negative impact of GPR on FI, fintech acts as a mitigating factor that lessens this negative effect. Although improvements have been noted throughout the ASEAN area over the research period, Vietnam has the lowest level of FI in the sample. To support inclusive financial systems in countries that are both ecologically and geopolitically sensitive, the findings emphasize the necessity of strategic policy interventions, such as regional collaboration, fintech uptake, and climate resilience planning. By offering fresh perspectives on how political, economic, and environmental hazards interact in emerging nations, this study contributes to the corpus of knowledge.