Digital Transformation, Financial Inclusion, and Sustainable Economic Performance in GCC Economies: Panel ARDL Evidence

Oil-dependent Gulf Cooperation Council (GCC) economies face persistent pressure to diversify, deepen their financial systems, and improve sustainability outcomes amid commodity price volatility. This study examines the long-run and short-run relationships between digital adoption, financial access, and sustainable economic performance in the six GCC economies over 2005–2022 (108 country-year observations). All three constructs are measured with transparent, reproducible composite indices built using public World Bank, IMF/ITU, and Global Carbon Project data, and the sustainable economic performance index combines real income per capita, manufacturing value added (SDG 9.2.1), and carbon productivity (SDG 9.4.1). The analysis combines cross-sectional-dependence-robust panel unit-root tests, Westerlund-type panel cointegration tests, pooled mean group, mean group, and dynamic fixed-effects panel ARDL estimators, Driscoll–Kraay fixed-effects models with an explicit interaction term, and Breitung–Candelon frequency-domain Granger tests. Digital adoption is positively associated with sustainable economic performance in one-way fixed-effects models, but the association disappears once common regional shocks are removed. Financial access shows no robust association. Given that the panel cointegration tests do not reject the null of no cointegration, the long-run ARDL coefficients are reported only as conditional long-run estimates, not as evidence of an established equilibrium relationship. The interaction term is negative rather than complementary. Frequency-domain tests detect no predictive content running from digital adoption or financial access to sustainable economic performance at any frequency. Financial access shows tentative one-way predictive content for digital adoption, but the data show neither bidirectional predictability between digital adoption and financial access nor positive complementarity. The findings caution against assuming that digital and financial expansion alone will deliver sustainable performance in rentier economies and point to the institutional and strategic capacities needed to convert them into diversification.