Financial inclusion in the digital era and its impact on sustainable development across ASEAN countries through combined nonparametric methods

This study investigates the impact of Digital Financial Inclusion (DFI) on Sustainable Development (SD) across ASEAN countries during 2007–2022. By employing the Quantile-on-Quantile Regression (QQR) and Wavelet Coherence (WC) approaches, the analysis captures both distributional heterogeneity and time–frequency dynamics. The findings reveal that the DFI–SD relationship is nonlinear and country-specific. Expanding DFI promotes SD in most ASEAN economies—particularly Indonesia, Malaysia, and Thailand—but exerts negative effects in Vietnam at lower quantiles and Singapore at higher quantiles. Furthermore, evidence of bidirectional causality indicates that improvements in SD also reinforce DFI development in several countries. During periods of financial distress and the COVID-19 pandemic, DFI served as a stabilizing channel supporting inclusive recovery. These insights highlight the crucial role of digital finance in advancing regional sustainability and underscore the need for context-sensitive policy frameworks tailored to each country’s financial maturity and institutional capacity.