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Digital financial inclusion, international remittances, and poverty reduction

Author

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  • Takeshi Inoue

    (Kobe University)

Abstract

Ensuring access to and usage of formal financial services through digital devices can be referred to as “digital financial inclusion” (DFI). In recent years, there has been a growing trend in the use of financial services, including money transfers through mobile phones. This study applies mobile phone subscriptions as a proxy to measure the degree of DFI and explores the individual effects of DFI and remittances and their interaction effects on poverty conditions in developing countries. Using panel data from 2000 to 2020 for 123 countries and employing the dynamic generalized method of moments estimation, the results reveal that DFI and remittance inflows help ameliorate poverty in developing countries. Furthermore, we find that the coefficient of the interaction term between DFI and remittances is statistically significant and positive, suggesting that the impact of DFI on poverty alleviation could weaken as remittance inflows increase in the remittance-receiving country and vice versa.

Suggested Citation

  • Takeshi Inoue, 2024. "Digital financial inclusion, international remittances, and poverty reduction," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 13(1), pages 1-20, December.
    • Handle: RePEc:spr:jecstr:v:13:y:2024:i:1:d:10.1186_s40008-024-00328-z
    DOI: 10.1186/s40008-024-00328-z
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    More about this item

    Keywords

    Digital financial inclusion; International remittances; Mobile penetration; Poverty reduction;
    All these keywords.

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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