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Does strong governance stimulate the effect of economic freedom and financial literacy on financial inclusion? a cross-country evidence

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  • Muhammad Hussain

    (Institute of Southern Punjab)

  • Farzan Yahya

    (Institute of Southern Punjab)

  • Muhammad Waqas

    (Jiangsu University)

Abstract

This study examines the interlinkages between financial literacy, economic freedom, government quality, and financial inclusion using cross-sectional and panel data analysis. Using a sample of 98 countries from the year 2007 to 2018, OLS and system GMM estimators were used to analyze the results. The estimation results indicate that financial literacy and government quality positively influence financial inclusion. Results also find that governance quality strengthens the effect of financial literacy on financial inclusion. The results derived from the dynamic panel model also reasonably conclude the positive effect of economic freedom on financial inclusion while government quality acts as a catalyst for their link. Our results are also robust to sub-panels based on the level of country risk.

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  • Muhammad Hussain & Farzan Yahya & Muhammad Waqas, 2021. "Does strong governance stimulate the effect of economic freedom and financial literacy on financial inclusion? a cross-country evidence," Future Business Journal, Springer, vol. 7(1), pages 1-10, December.
    • Handle: RePEc:spr:futbus:v:7:y:2021:i:1:d:10.1186_s43093-021-00090-9
    DOI: 10.1186/s43093-021-00090-9
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    1. Rajesh Barik & Sanjaya Kumar Lenka, 2023. "Does financial inclusion control corruption in upper-middle and lower-middle income countries?," Asia-Pacific Journal of Regional Science, Springer, vol. 7(1), pages 69-92, March.

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