IDEAS home Printed from https://ideas.repec.org/a/bpj/rmeecf/v21y2025i3p269-294n1001.html

ODA and Financial Inclusion: How is the Impact Transmitted in MENA Countries?

Author

Listed:
  • Ben Moussa Wided

    (Esprit School of Business, Ariana, Tunisia)

  • Troudi Marwa

    (Esprit School of Business, Ariana, Tunisia)

Abstract

This study explores the effects of foreign direct investment (FDI) and official development assistance (ODA) on financial inclusion across MENA countries from 1960 to 2023. Using a VAR model, we compute impulse response functions and variance decompositions. The findings show that, for most countries, FDI and ODA have minimal and short-lived effects on financial inclusion. However, Lebanon stands as an exception: financial inclusion (specifically FI_2) responds significantly and positively to an FDI shock, and the effect is more persistent compared to other countries. Variance decomposition further indicates that FDI shocks contribute the most to the forecast error variance of financial inclusion in Lebanon, highlighting the relatively stronger role of FDI in shaping its financial inclusion dynamics. Overall, the limited influence of external financial flows elsewhere in the region suggests that they are insufficient for sustained improvements in financial inclusion. Instead, domestic factors remain critical, as evidenced by the strong and stabilizing response of financial inclusion to its own shocks. These results underscore the need for internal resilience and tailored national policies to effectively enhance financial inclusion across MENA countries.

Suggested Citation

  • Ben Moussa Wided & Troudi Marwa, 2025. "ODA and Financial Inclusion: How is the Impact Transmitted in MENA Countries?," Review of Middle East Economics and Finance, De Gruyter, vol. 21(3), pages 269-294.
    • Handle: RePEc:bpj:rmeecf:v:21:y:2025:i:3:p:269-294:n:1001
    DOI: 10.1515/rmeef-2025-0004
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/rmeef-2025-0004
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/rmeef-2025-0004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:rmeecf:v:21:y:2025:i:3:p:269-294:n:1001. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyterbrill.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.