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Digital Financial Inclusion and Sustainable Development in ASEAN: Insights from Monte Carlo Simulations

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  • Nguyen Tien Khoi
  • Le Quoc Dinh

Abstract

Climate change is a global challenge that demands collective action, especially as a significant portion of the population—more than half—lacks access to formal financial systems. Addressing these challenges is critical for achieving sustainable development (SD). In the context of global economic shifts toward digital transformation and the increasing role of digital technology in finance, digital financial inclusion (DFI) is expected to be a key driver in advancing SD across countries. This study examines the impact of DFI on SD in ASEAN countries from 2007 to 2022. Using Bayesian methods, which effectively address issues such as small sample sizes, autocorrelation and endogeneity, the results show that DFI generally promotes SD. However, when considering economic cycles, DFI can have a negative impact on SD. When examining the effects of DFI on SD in individual countries, the findings indicate that DFI positively influences SD in Indonesia, Myanmar, Thailand, Singapore and Vietnam, while it has a negative effect in Cambodia, Malaysia and the Philippines. Based on these findings, the study suggests the following policy implications.

Suggested Citation

  • Nguyen Tien Khoi & Le Quoc Dinh, 2025. "Digital Financial Inclusion and Sustainable Development in ASEAN: Insights from Monte Carlo Simulations," Economic Papers, The Economic Society of Australia, vol. 44(3), pages 233-256, September.
    • Handle: RePEc:bla:econpa:v:44:y:2025:i:3:p:233-256
    DOI: 10.1111/1759-3441.70002
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