Institutional determinants of financial inclusion: evidence from world economies
International Journal of Development Issues
ISSN: 1446-8956
Article publication date: 16 April 2020
Issue publication date: 17 June 2020
Abstract
Purpose
Financial inclusion is an approach for mobilizing saving and facilitating investments that help promote economic development and pave the way for sustainable development. This paper aims to examine the impact of world governance indicators (WGIs) on the improvement of financial inclusion across world economies.
Design/methodology/approach
This paper uses the global database of financial inclusion indicators (global findex) for the years 2011, 2014 and 2017. The WGIs are used as proxies for the effects of governmental institutional arrangements. Using panel data analysis, a fixed generalized linear model is estimated for four common financial indicators; namely, borrowed from a financial institution, saved at a financial institution, credit card and debit card ownership.
Findings
The empirical results reveal that control of corruption, government effectiveness, political stability and voice and accountability are the significant WGIs that influence financial inclusion significantly.
Originality/value
This paper contributes to the literature in two ways. First, this paper offers validating the results previously reported in related studies. Second, this paper offers robust estimates of the effects of the institutional WGIs on the promotion of financial inclusion.
Keywords
Acknowledgements
The authors appreciate very much indeed the comments and recommendations offered by two anonymous reviewers that indeed added to the value and readability of the paper. The gratitude extends also to Professor Dr Dilip Dutta, the editor of the journal, for the invaluable understanding and cooperation.
Citation
Eldomiaty, T., Hammam, R. and El Bakry, R. (2020), "Institutional determinants of financial inclusion: evidence from world economies", International Journal of Development Issues, Vol. 19 No. 2, pp. 217-228. https://doi.org/10.1108/IJDI-08-2019-0147
Publisher
:Emerald Publishing Limited
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