THE ROLE OF GOVERNMENT POLICY RESPONSES IN DRIVING DIGITAL FINANCING DURING COVID-19: EVIDENCE FROM SELECTED ASIAN COUNTRIES
DOI:
https://doi.org/10.32890/jis2026.22.2.11Keywords:
Asia, COVID-19, pandemic, digital financing, government supportAbstract
The COVID-19 pandemic imposed severe economic strain on emerging economies worldwide while simultaneously accelerating the adoption of digital financing as governments sought ways to sustain financial activity during lockdowns. However, in developing countries, this rapid digital transformation required deliberate government support. This study examines how government policy responses shaped digital financing adoption during the pandemic across four Asian economies: Malaysia, Thailand, India, and Pakistan. Using a random effects model and monthly panel data covering the period from January to December 2020, the study disaggregates government policy responses into distinct policy dimensions. The results show that overall government policy responses exert a positive and statistically significant effect on digital financing adoption. Income support and loan moratorium policies have a direct positive effect on digital financing adoption, whereas containment and closure measures have no statistically significant effect. Cross-country comparisons reveal meaningful variation in policy design and implementation. These findings demonstrate that not all forms of government intervention are equally effective; rather, the type of policy support determines its impact on digital financing adoption. The study offers policy recommendations for strengthening digital finance ecosystems in developing economies beyond periods of crisis.
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