Linkage between Financial Inclusion and Economic Growth: An Empirical Study of the Emerging Indian Economy

Dahiya, Suman; Kumar, Manoj

doi:10.1177/0972262920923891

Cited by 71 publications

(49 citation statements)

References 26 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Studies relate financial inclusion to other macroeconomic variables such as growth and incidence of poverty. The study of Dahiya and Kumar (2020) documents that financial inclusion does not significantly relate to growth in India after using Bayesian vector auto-regression model to explore the relationship. Abor et al (2018) show that financial inclusion improves the welfare of the poor in Ghana.…”

Section: Literature Reviewmentioning

confidence: 99%

Shadow economy in Africa: how relevant is financial inclusion?

Ajide

2021

JFRC

View full text Add to dashboard Cite

Purpose This study aims to investigate the possible relationship between financial inclusion and shadow economy in selected African countries. Design/methodology/approach The study uses panel data estimation technique and Toda and Yamamoto causality approach. The data of selected African counties over a period of 2005–2015 are sourced from World Bank Development Indicators, International Monetary Fund International Financial statistics database and International Country Risk Guide. Findings The results show that financial inclusion reduces the size of shadow economy. The causality results show that there is a unidirectional causality moving from financial inclusion to shadow economy. The results demonstrate that a country with lower level of corruption and higher level of growth can benefit more in reducing the size of shadow economy through financial inclusion. Originality/value This study provides the first evidence of the link between financial inclusion and shadow economy from the Sub-Saharan Africa perspective. The study suggests that financial inclusion may be useful in affecting the size of shadow economy in Africa.

show abstract

Section: Literature Reviewmentioning

confidence: 99%

Shadow economy in Africa: how relevant is financial inclusion?

Ajide

2021

JFRC

View full text Add to dashboard Cite

show abstract

“…The link between FI and growth is very rich according to the literature [48,49], and that relationship is mostly positive [50]. Econometric analyses can be conducted to see the functional relationship of FI with economic growth.…”

Section: Literature Reviewmentioning

confidence: 99%

Financial Inclusion’s Role in Economic Growth and Human Capital in South Asia: An Econometric Approach

2021

View full text Add to dashboard Cite

Many of the 2030 sustainable development goals have targeted the strengthening of financial inclusion, which is currently a key policy priority on the agendas of most governments in developing nations. The process of facilitating banking and financial services for individuals is called financial inclusion, which supports growth and the broader development goals of an economy. Although economic growth and human capital development indices have been analyzed using different proxy variables, insufficient attention has been paid to constructing a composite index for measuring this to achieve greater sustainability in terms of the economy, communities, and the environment. This study sought to address this gap using secondary data from eight countries in South Asia from 2004 to 2018. A financial inclusion index was developed through principal component analysis using an econometric approach of panel data with vector error correction models and a Granger causality test. As per the results of the study, financial inclusion has a long-run impact on human capital development in South Asian countries, whereas it has a short-run positive impact on economic growth. Domestic credits to the private sector also impact the short-run growth and human capital development in the economy. This ensures the confidence of vulnerable communities in their economy, as well as information management, and allows for quality enhancements of transactions with fewer environmental impacts. Government intervention to improve access to financial services, including ATMs and commercial banking, is one policy allowing digital finance to accelerate the achievement of sustainable development goals in South Asian countries.

show abstract

“…This hypothesis was upheld in studies that were conducted in developing countries, either as a panel (Gretta 2017;Iqbal & Sami 2017) or individual countries, such as and Otiwu et al (2018) in Nigeria and Mwaitete and George (2018) in Tanzania. Likewise, Dahiya and Kumar (2020) examined the interplay between financial inclusion and economic growth in India from 2004 to 2014 and concluded that financial inclusion drives economic growth.…”

Section: Financial Inclusion and Economic Growthmentioning

confidence: 99%

Financial inclusion, bank competition and economic growth in Africa

Chinoda

Mashamba

2021

Journal of Economic and Financial Sciences

View full text Add to dashboard Cite

Orientation: The relevance of bank competition and economic growth for boosting financial inclusion is attracting unprecedented attention from academics and policymakers, mainly because of several persisting issues which, if addressed, can enhance the functionality of governments, businesses, individuals and the economy.Research purpose: The study aims to examine the interplay between financial inclusion, bank competition and economic growth in Africa.Motivation for the study: Previous literature focuses mainly on the nexus between financial inclusion and bank competition, financial inclusion and economic growth and bank competition and economic growth producing diverse results, with a dearth of literature on the trivariate link between the three variables.Research approach/design and method: This study employed the pooled mean group estimation-based panel autoregression distribution lag approach from 2004 to 2018. A panel data analysis for 20 African countries was used.Main findings: The study found a significant positive relationship between financial inclusion and economic growth in the long run. However, in the short run, economic growth significantly reduces financial inclusion. We also found that in the long-run bank competition reduces financial inclusion in line with the information hypothesis. However, in the short run the effect is significantly positive, consistent with the market power hypothesis.Practical/managerial implications: Policymakers and development agencies should implement measures that reckon incentives that can accelerate bank competition to bring on-board the unbanked. They should also take note of financial inclusion measurement in addressing financial inclusion challenges. Moreover, they should minimise barriers to financial inclusion to enhance bank competition and stability.Contribution/value-add: The study managed to discover how bank competition and economic growth influences financial inclusion.

show abstract

Linkage between Financial Inclusion and Economic Growth: An Empirical Study of the Emerging Indian Economy

Cited by 71 publications

References 26 publications

Shadow economy in Africa: how relevant is financial inclusion?

Shadow economy in Africa: how relevant is financial inclusion?

Financial Inclusion’s Role in Economic Growth and Human Capital in South Asia: An Econometric Approach

Financial inclusion, bank competition and economic growth in Africa

Contact Info

Product

Resources

About