The Impact of Fintech Growth, E-Government, and Macroeconomic Uncertainty on Bank Stability: Evidence from Vietnam

Abstract:

This study examines the impact of fintech development and e-government on bank stability under conditions of macroeconomic uncertainty in Vietnam. Using an unbalanced panel dataset of 28 commercial banks over the period 2010–2024, the study employs the System GMM estimator to address endogeneity and dynamic effects. The empirical results indicate that fintech development exerts a positive and statistically significant effect on bank stability; an increase in fintech development improves the Z-score with an estimated coefficient of 0.520, highlighting the role of technological innovation in enhancing banks’ resilience. E-government also has a direct and positive effect on bank stability, with a coefficient of 0.429, reflecting the importance of digital governance in strengthening the institutional environment and financial supervision. However, interaction analysis reveals that the moderating effect of e-government on the relationship between fintech development and bank stability weakens for large banks, as evidenced by the negative and significant coefficient of the triple interaction term (–0.052). In addition, macroeconomic uncertainty adversely affects bank stability, underscoring the importance of a stable macroeconomic environment. Overall, the findings provide systematic quantitative evidence on the nexus between financial innovation, digital institutions, and bank stability in an emerging economy.