Digital financial inclusion and inclusive development in lower-middle-income countries: the enabling role of institutional quality

IF 1.1 Q3 ECONOMICS

Journal of Chinese Economic and Foreign Trade Studies Pub Date : 2024-07-22 DOI:10.1108/jcefts-02-2024-0017

Josephine Ofosu-Mensah Ababio, Eric Boachie Yiadom, Daniel Ofori-Sasu, Emmanuel Sarpong–Kumankoma

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引用次数: 0

Abstract

Purpose

This study aims to explore how institutional quality links digital financial inclusion to inclusive development in lower-middle-income countries, considering heterogeneities.

Design/methodology/approach

The study uses dynamic generalized method of moments to analyze a balanced panel data set of 48 lower-middle- income countries (LMICs) from 2004 to 2022, sourced from various databases. It assesses four variables and conducts checks for study robustness.

Findings

The study reveals a positive link between digital financial inclusion and inclusive development in LMICs, confirming theoretical predictions. Empirically, nations with quality institutions exhibit greater financial and developmental inclusion than those with weak institutions, emphasizing the substantial positive impact of institutional quality on the connection between digital financial inclusion and inclusive development in LMICs. For instance, the interaction effect reveals a substantial increase of 0.123 in inclusive development for every unit increase in digital financial inclusion in the presence of strong institutions. The findings provide robust empirical evidence that the presence of quality institutions is a key catalyst for the benefits of digital finance in inclusive development.

Originality/value

This study offers significant insights into digital financial inclusion and inclusive development in LMICs. It confirms a positive relationship between digital financial inclusion and inclusive development, highlighting the pivotal role of institutional quality in amplifying these benefits. Strong institutions benefit deprived individuals, families, communities and businesses, enabling full access to digital financial inclusion benefits. This facilitates engagement in development processes, aiding LMICs in achieving Sustainable Development Goals.

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中低收入国家的数字金融包容性和包容性发展：机构质量的促进作用

本研究采用动态广义矩法，对来自不同数据库的 2004 年至 2022 年 48 个中低收入国家的平衡面板数据集进行分析，评估了四个变量，并对研究的稳健性进行了检验。研究结果该研究揭示了数字金融包容性与中低收入国家包容性发展之间的正向联系，证实了理论预测。从经验上看，与机构薄弱的国家相比，机构质量高的国家表现出更大的金融和发展包容性，这强调了机构质量对低收入和中等收入国家数字金融包容性和包容性发展之间联系的实质性积极影响。例如，互动效应显示，在机构强大的情况下，数字金融包容性每增加一个单位，包容性发展就会大幅增加 0.123。研究结果提供了有力的经验证据，表明优质机构的存在是数字金融在包容性发展中获益的关键催化剂。它证实了数字金融普惠性与包容性发展之间的积极关系，强调了机构质量在扩大这些效益方面的关键作用。强有力的机构有利于贫困的个人、家庭、社区和企业，使他们能够充分享受数字金融普惠的益处。这有助于参与发展进程，帮助低收入和中等收入国家实现可持续发展目标。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Chinese Economic and Foreign Trade Studies ECONOMICS-

CiteScore

3.40

自引率

4.20%

发文量

期刊介绍： The Journal of Chinese Economic and Foreign Trade Studies (JCEFTS) negotiates China''s unique position within the international economy, and its interaction across the globe. From a truly international perspective, the journal publishes both qualitative and quantitative research in all areas of Chinese business and foreign trade, technical economics, business environment and business strategy. JCEFTS publishes high quality research papers, viewpoints, conceptual papers, case studies, literature reviews and general views. Emphasis is placed on the publication of articles which seek to link theory with application, or critically analyse real situations in terms of Chinese economics and business in China, with the objective of identifying good practice in these areas and assisting in the development of more appropriate arrangements for addressing crucial issues of Chinese economics and business. Papers accepted for publication will be double–blind peer-reviewed to ensure academic rigour and integrity.