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Revisiting the relation between financial inclusion and economic growth: a global analysis using panel threshold regression

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  • Siddiki, Jalal
  • Bala-Keffi, Ladi R.

Abstract

This study revisits the relationship between financial inclusion and economic growth using data from 153 countries. Despite the extensive discourse on the role of financial inclusion in spurring economic growth, empirical evidence presents mixed outcomes. Financial inclusion, measured as account ownership at a financial institution or with a mobile-money-service provider, is pivotal to integrating the unbanked population into the economic mainstream, fostering inclusive economic growth. Our analysis demonstrates that the relationship exhibits positive yet varying effects across different thresholds of financial development. Thus, while financial inclusion consistently correlates with economic growth, the magnitude and impact of this relationship vary between countries at different levels of financial development, highlighting the importance of the tailoring of financial inclusion policies to consider the specific developmental stage of the financial sector. Results also reveal that the effects of financial inclusion and financial development vary across income groups and regions, and with regard to economic fragility.

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  • Siddiki, Jalal & Bala-Keffi, Ladi R., 2024. "Revisiting the relation between financial inclusion and economic growth: a global analysis using panel threshold regression," Economic Modelling, Elsevier, vol. 135(C).
    • Handle: RePEc:eee:ecmode:v:135:y:2024:i:c:s0264999324000634
    DOI: 10.1016/j.econmod.2024.106707
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    3. Abdelghani KAHELA & Ouissam HOCINI & Mohamed BOULESNAM & Kamel BASSOUR, 2025. "Quantitative insights into the impact of financial inclusion on economic growth: an econometric evaluation of Arab countries (2011-2022)," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(1(642), S), pages 103-124, Spring.
    4. Anup Kumar Yadava & Vishal Yadav & Bhanu Pratap Singh, 2025. "Benchmarking economic performance of Indian States through supply and demand side financial inclusion indices: a DEA approach," SN Business & Economics, Springer, vol. 5(1), pages 1-25, January.
    5. Tufail Saira & Aljarallah Ruba & Munir Madiha & Alvi Shahzad & Ul Hassan Mehboob, 2025. "Financial Inclusion, Financial Depth, and Macroeconomic Fluctuations," Economics - The Open-Access, Open-Assessment Journal, De Gruyter, vol. 19(1), pages 1-23.

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