Journal article
Financial inclusion in developing countries: Do quality institutions matter?
Journal of international financial markets, institutions & money, v 81
Nov 2022
Featured in Collection : UN Sustainable Development Goals @ Drexel
Abstract
•This study examines the dynamic impact of institutional quality on financial inclusion.•It confirms that institutional quality promotes both the access to and the use of formal financial services.•Economic growth and remittances significantly contribute to financial inclusion.•Human development plays a significant role in driving financial inclusion.
This study examines the dynamic impact of institutional quality (control of corruption, government effectiveness, political stability, regulatory quality, rule of law, and voice and accountability) on financial inclusion across seventy-three developing countries. We conduct multiple dynamic-panel-data approaches to address potential heterogeneity, cross-sectional dependency, and endogeneity issues. Our findings reveal that institutional quality promotes both the access to and the use of formal financial services in developing countries. More specifically, economic growth, human development index, domestic credit, financial development index (the depth & access to finance, and the efficiency of financial institutions and financial markets), and remittances significantly contribute to financial inclusion. Our findings also confirm our proposition that human development plays a significant role in driving financial inclusion. This study provides several practical policy implications to developing countries aiming to strengthen their institution-induced financial market deepening.
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Details
- Title
- Financial inclusion in developing countries: Do quality institutions matter?
- Creators
- Veton Zeqiraj - University of PrishtinaKazi Sohag - Graduate School of Economics and Management, Ural Federal University, RussiaShawkat Hammoudeh - Drexel University
- Publication Details
- Journal of international financial markets, institutions & money, v 81
- Publisher
- Elsevier
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Economics (School of Economics)
- Web of Science ID
- WOS:000878739000002
- Scopus ID
- 2-s2.0-85140485267
- Other Identifier
- 991019244868604721
UN Sustainable Development Goals (SDGs)
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- Collaboration types
- Domestic collaboration
- International collaboration
- Web of Science research areas
- Business, Finance
- Economics