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Financial Inclusion and Economic Growth: Comparative Panel Evidence from Developed and Developing Asian Countries

Author

Listed:
  • Shahzad Hussain
  • Ajid ur Rehman
  • Sabeeh Ullah
  • Abdul Waheed
  • Shoaib Hassan

Abstract

We investigate the empirical nexus between financial inclusion and economic growth for an extended sample of 21 Asian countries spanning over a period from 2004 to 2019. Further, we also conducted a sub-sample analysis by dividing the overall samples into developed and developing countries. Our results reveal a significant positive long-term impact of financial inclusion on economic growth in Asia. Our pair-wise causality test shows bidirectional causality between financial inclusion and economic development. Our robust results are consistent across various estimation techniques. Our findings suggest that the influence of financial inclusion on economic growth is more pronounced in developing countries compared to developed countries. Our results hold across subsamples. These findings posit important policy insights to enable the policy-makers in designing policies that ensure efficient and inclusive financial system on an equitable basis to achieve sustainable economic growth. JEL classification: O16; O57; C38; C33

Suggested Citation

  • Shahzad Hussain & Ajid ur Rehman & Sabeeh Ullah & Abdul Waheed & Shoaib Hassan, 2024. "Financial Inclusion and Economic Growth: Comparative Panel Evidence from Developed and Developing Asian Countries," SAGE Open, , vol. 14(1), pages 21582440241, February.
    • Handle: RePEc:sae:sagope:v:14:y:2024:i:1:p:21582440241232585
    DOI: 10.1177/21582440241232585
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    More about this item

    Keywords

    financial inclusion; economic growth; panel data analysis; principal component analysis; Asia;
    All these keywords.

    JEL classification:

    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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