Financial Inclusion, Institutional Quality and Financial Development: Empirical Evidence from OIC Countries

Nazir, Muhammad Imran; Hashmi, Shujahat Haider; Ullah, Wajeeh

doi:10.2139/ssrn.3408639

Cited by 9 publications

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“…Using the dynamic generalized method of moments (GMM) in a panel data made up of 26 countries, the study concluded that better governance and institutional quality enhances the development of the financial sector for developing countries whilst trade liberalization and economic growth were found to drive financial depth for developed countries in the region. Ali et al (2022) examined the effect of financial inclusion and institutional quality on financial development, with emphasis on the moderation influence of institutional quality on the nexus between financial inclusion and financial development. Using data from 45 Organization of Islamic Cooperation (OIC) countries from 2000 to 2016, the results showed a significant positive effect between financial inclusion, institutional quality and financial development.…”

Section: Empirical Literaturementioning

confidence: 99%

“…approached the subject matter by focusing on countries in Asia and the Pacific from 1995 to 2011. Using the dynamic generalized method of moments (GMM) in a panel data made up of 26 countries, the study concluded that better governance and institutional quality enhances the development of the financial sector for developing countries whilst trade liberalization and economic growth were found to drive financial depth for developed countries in the region Ali et al (2022). examined the effect of financial inclusion and institutional quality on financial development, with emphasis on the moderation influence of institutional quality on the nexus between financial inclusion and financial development.…”

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confidence: 99%

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Financial development and institutional quality among emerging economies

Abaidoo

Agyapong

2022

JED

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PurposeThis study examines how institutional quality influences variability in financial development among economies in Sub-Saharan Africa (SSA).Design/methodology/approachEmpirical estimations verifying various relationships are performed using the limited information maximum likelihood (LIML) estimation technique.FindingsThe results suggest that institutional quality enhances the pace of financial development among economies in the sub-region all things being equal. In a further micro-level analysis where components of institutional quality index are examined separately, the study’s results suggest that effective governance, regulatory quality, rule of law and accountability tend to have a significant positive impact on financial sector development.Research limitations/implicationsFindings of the study suggest that policies geared towards improving governance and regulatory institutions can augment development of the financial sector among economies in SSA; governments and policymakers are therefore encouraged to resource noted institutions to play effective roles for the development of the financial sector.Originality/valueCompared to related studies, this study reorients existing paradigm, which emphasizes the role of governance and institutional variables in the economic growth discourse. The authors’ empirical inquiry rather focuses on how governance and institutional structures influence regional financial development dynamics. Specifically, this study differs from most macro-level studies found in literature because it examines the impact of hitherto unexamined governance and institutional variables on financial development among economies in SSA.

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Section: Empirical Literaturementioning

confidence: 99%

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confidence: 99%

Financial development and institutional quality among emerging economies

Abaidoo

Agyapong

2022

JED

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“…While Honohan (2008) utilizes financial access data from 160 countries in an OLS setting and shows that higher mobile phone usage, greater institutional quality, and better governance are all positively connected with access factors. Financial inclusion and institutional quality, according to Ali et al (2019), have statistically significant beneficial effects on financial development. Furthermore, they discover that institutional quality interacts with financial inclusion measures to influence financial growth substantially and favorably.…”

Section: Empirical Literaturementioning

confidence: 99%

Causes of Financial Improvement in Sub-Saharan African Countries: should rule of law be considered?

Adeyemi

David

2022

Preprint

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Looking into the contributing factor of financial improvement in sub-Saharan Africa, this study pulls its basis from the McKinnon-Shaw model of financial liberalization and Schumpeter's innovation model. The ability to link financial institutions to financial development influences the choice of explanatory variables in this study, in addition to other important determinants proposed in the previous relevant study. We used a generalized method of moments (GMM) estimates on the way to establish relationships among variables. Both static and dynamic models show that GDP per capita is not always a full-size variable to explain the financial improvement. However, past financial improvements and the rule of law are life-size variables that explain financial improvements. The rule of law has proven to be one of the institutional factors considered and an important factor in explaining financial improvement. From this, it can be inferred that the rule of law and the impact of past financial growth remain decisive variables for the financial improvement of sub-Saharan Africa.

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“…In the literature, there has been much emphasis on the effect of institutional quality on the level of financial inclusion (e.g. Ali et al, 2021;Xu, 2020;Evans, 2018;Lashitew et al, 2019;Nguyen and Ha, 2021;Anthony-Orji et al, 2019;Nkoa and Song, 2020;Ouechtati, 2022;Kebede et al, 2021;Kwenda and Chinoda, 2019;Aracil et al, 2022;and Eldomiaty et al, 2020). These studies control for the effect of institutional quality on the level of financial inclusion.…”

Section: Introductionmentioning

confidence: 99%

Institutional Theory of Financial Inclusion

Ozili

2022

Advances in Human Resources Management and Organizational Development

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This article advocates a new addition to the theories of financial inclusion, which is the institutional theory of financial inclusion. The case for a new theory arises from the role of institutions or non-market structures in influencing the level of financial inclusion. Postulating an institutional theory of financial inclusion is important due to the need to understand financial inclusion from the context of institutions and non-market structures that people have a great deal of trust in. The institutional theory of financial inclusion has the capacity to generate a wide range of testable hypotheses, and can provide the social scientist with tools that are relevant for understanding the broad spectrum of financial inclusion in society.

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Financial Inclusion, Institutional Quality and Financial Development: Empirical Evidence from OIC Countries

Cited by 9 publications

References 0 publications

Financial development and institutional quality among emerging economies

Financial development and institutional quality among emerging economies

Causes of Financial Improvement in Sub-Saharan African Countries: should rule of law be considered?

Institutional Theory of Financial Inclusion

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