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Institutional determinants of financial inclusion: evidence from world economies

Tarek Eldomiaty (Faculty of Business Administration and International Trade, Misr International University, Cairo, Egypt)
Rasha Hammam (Faculty of Business Administration and International Trade, Misr International University, Cairo, Egypt)
Rawan El Bakry (Faculty of Business Administration and International Trade, Misr International University, Cairo, Egypt)

International Journal of Development Issues

ISSN: 1446-8956

Article publication date: 16 April 2020

Issue publication date: 17 June 2020

1036

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

Copyright © 2020, Emerald Publishing Limited

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