Impact of digital financial inclusion on economic growth: a study on Bangladesh

Purpose - The purpose of the study is to find out the impact of Digital Financial Inclusion (DFI) on economic growth [(Industrial Production Index (INDP)] of Bangladesh. Design/methodology/approach - Using the monthly data over the period 2018 M12 to 2021 M12, this study applied the Auto-regressive Distributed Lag (ARDL) model to assess the effect of DFI indicators on INDP. The secondary data was collected from the Bangladesh Bank and CEIC Global Economic Data. Findings - The study found that the majority of DFI indicators are positively associated with INDP. From the short-run ARDL, it is seen that one unit positive increase in Point of Sales Transactions (POST) can increase the INDP by 0.055 units. From the long-run ARDL, it is seen that POST and e-commerce transactions (ECOMT) have a significant positive impact, while Automated Teller Machine Transactions (ATMT) have a significant negative effect on INDP. One unit increase in POST and ECOMT increases INDP by 0.13544 and 0.11611 units, respectively. Research limitations/implications - During the era of the fourth industrial revolution, the findings will be beneficial for policymakers, financial technology service providers, manufacturers, consumers, corporations and investors as they pave the way for a more inclusive approach to financial transactions for economic growth. Originality/value - The study’s novelty is that it explored the influential DFI indicators and shed light on both short-run and long-run relationships between the indicators and macro-economy from the context of a developing nation. Peer review - The peer review history for this article is available at:https://publons.com/publon/10.1108/IJSE-04-2023-0306