International Financial Integration and Perceived Sustainable Economic Growth Prospects: The Roles of Financial Development and Institutional Quality

Purpose: This study examines a conditional framework linking international financial integration with perceived sustainable economic growth prospects through financial development and tests institutional quality as a moderator of the direct integration–growth association. It distinguishes access to international finance from domestic intermediation capacity and the governance conditions under which financial integration is associated with sustainable development prospects. Method: A cross-sectional quantitative survey of 480 respondents was analyzed using SmartPLS 4 and partial least squares structural equation modeling (PLS-SEM). The instrument comprised 20 seven-point items measuring international financial integration, financial development, institutional quality, and sustainable economic growth prospects. The measurement and structural models were evaluated, and direct, indirect, and interaction paths were assessed using 5,000 bootstrap replications. Cross-validation, robustness, and sensitivity analyses served as additional diagnostics. Findings: In the sample, international financial integration was positively associated with financial development (? = .494), which was positively associated with sustainable growth prospects (? = .343). The indirect association was .170, with a 95% bootstrap confidence interval of [.122, .219]. The direct association at average institutional quality was not statistically supported (? = .040, p = .396), whereas the integration–institutional-quality interaction was positive (? = .209, p < .001). Explained variance was .266 for financial development and .278 for sustainable growth prospects. These findings support a conditional integration–intermediation–governance pattern within the study sample, while the cross-sectional design does not establish causal effects. Originality/Implications: The study evaluates an explicitly bounded integration–intermediation–governance framework with transparent measurement and conditional-effect reporting. The findings suggest that financial openness, domestic financial capability, and institutional safeguards should be considered jointly rather than treating cross-border financial volume as equivalent to sustainable development.