FINTECH ADOPTION, GEOPOLITICAL RISK AND SUSTAINABLE PERFORMANCE OF DEVELOPING COUNTRIES: A MEDIATING ROLE OF GREEN FINANCE

Abstract

This study investigates the determinants of sustainable performance in 18 developing countries during 2010–2025. The explanatory variables include green finance, fintech adoption, geopolitical risk, foreign direct investment, financial development, and domestic credit to the private sector, while sustainable performance is measured through environmental, social, governance, and combined sustainability dimensions. The study employs the Generalized Method of Moments and Structural Equation Modeling to examine direct relationships and the mediating role of green finance. The findings indicate that fintech adoption and foreign direct investment positively influence environmental performance, whereas green finance and geopolitical risk have insignificant direct effects. For social performance, fintech adoption and green finance demonstrate stronger effects, while financial development and foreign direct investment exhibit weaker associations. Governance performance is significantly influenced by fintech adoption and foreign direct investment, whereas green finance, geopolitical risk, and financial development show weaker effects. The mediation analysis indicates that green finance does not significantly mediate the relationship between fintech adoption and sustainable performance. The findings emphasize the importance of technological innovation, financial development, and environmentally oriented investment in strengthening sustainability outcomes and supporting long-term economic development in developing countries.