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Does Financial Inclusion Increase Participation in Global Value Chains? Evidence from African Countries

Author

Listed:
  • Dieudonné MIGNAMISSI

    (Yaoundé, Cameroon)

  • Simplice A. ASONGU

    (Johannesburg, South Africa)

  • Eric Xaverie POSSI TEBENG

    (Yaoundé, Cameroon)

  • Yolande E. NGOUNGOU

    (Yaoundé, Cameroon)

Abstract

The present paper assesses how financial inclusion promotes the participation of Africa in global value chains (GVC), contingent on financial development and institutional quality. The focus is on 30 African countries over the period 2004-2018, and the empirical evidence is based on fixed effects regressions and the Lewbel (2012) instrumental variable technique. It is apparent from the findings that financial inclusion promotes the participation of sampled countries in GVC. Moreover, financial development and institutional quality are mechanisms by which financial inclusion indirectly promotes the participation of corresponding countries in GVC. It follows that financial inclusion has both direct and indirect positive effects on GVC participation. The results of this paper underscore the need for integrated policy frameworks that strengthen inclusive finance, deepen financial sector development, and improve institutional quality to boost African economies’ participation in international production networks.

Suggested Citation

  • Dieudonné MIGNAMISSI & Simplice A. ASONGU & Eric Xaverie POSSI TEBENG & Yolande E. NGOUNGOU, 2025. "Does Financial Inclusion Increase Participation in Global Value Chains? Evidence from African Countries," Working Papers of the African Governance and Development Institute. 25/028, African Governance and Development Institute..
    • Handle: RePEc:agd:wpaper:25/028
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    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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