This paper investigates the effect of financial inclusiveness on economic growth in selected developed and developing countries (63 countries) for the years of 2014 and 2017. The level of financial inclusiveness for each country is calculated using a new construction of the financial inclusion index. The role of financial inclusiveness on economic growth is subsequently estimated using a cross-sectional threshold regression technique. The main findings revealed that there is a threshold effect of the financial inclusiveness-growth nexus, which means that financial inclusiveness exhibits a non-monotonic positive relation with economic growth. The positive effect is more pronounced at a high level than in the low level of financial inclusion index. These new findings should motivate policymakers and the banking sector in each country to exert greater effort in raising the level of financial inclusion in stimulating sustainable economic growth.
This paper examines the effect of financial inclusion on the firm growth of the manufacturing sector (513 firms) in selected ASEAN countries (Malaysia, Philippines, and Vietnam) using a cross-section threshold estimation technique. The levels of financial inclusion across firms were measured based on the distribution of financial services (access to credit). The main findings revealed that there is a non-monotonic effect of financial inclusion on the firm’s growth. These findings show that the impact of financial inclusion on firm growth in the manufacturing sector is significantly positive below a threshold point, and turns to significantly negative after a certain threshold point has been reached. These new findings suggest that manufacturing firm owners and banking institutions should deepen their financial inclusion efforts, and limit the distribution of credit access within the optimum value or threshold level in promoting the growth of the firm.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.