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Corporate governance and financial inclusion

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  • Ozili, Peterson K

Abstract

This paper examines the association between corporate governance and financial inclusion in terms of correlation and causation. It examines whether countries that have a strong corporate governance environment also have better financial inclusion outcomes. The indicators of financial inclusion are automated teller machines (ATMs) per 100,000 adults, bank accounts per 1,000 adults and bank branches per 100,000 adults, while the indicators of corporate governance are extent of corporate transparency index, the extent of director liability index, the extent of disclosure index, the extent of ownership and control index, the extent of shareholder rights index, minority investors protection index and ease of shareholder suits index. The data were analyzed using Pearson correlation and granger causality tests. The results indicate that strong corporate governance is significantly correlated with better financial inclusion outcomes. The regional analyses show that corporate governance has a significant positive association with financial inclusion in Asian countries and in Middle East countries. However, a positive and negative association was observed between some indicators of corporate governance and financial inclusion in European countries, North American countries, South American countries, African countries and in Middle East and North Africa countries (MENA) countries, implying that strong corporate governance has a positive and negative association with financial inclusion depending on the indicators of corporate governance and financial inclusion used. There is also evidence of uni-directional granger causality between corporate governance and financial inclusion.

Suggested Citation

  • Ozili, Peterson K, 2023. "Corporate governance and financial inclusion," MPRA Paper 118799, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:118799
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    References listed on IDEAS

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    1. Nitin Kumar, 2013. "Financial inclusion and its determinants: evidence from India," Journal of Financial Economic Policy, Emerald Group Publishing, vol. 5(1), pages 4-19, February.
    2. Ozili, Peterson K, 2020. "Social inclusion and financial inclusion: international evidence," MPRA Paper 101811, University Library of Munich, Germany.
    3. Tarek Eldomiaty & Rasha Hammam & Rawan El Bakry, 2020. "Institutional determinants of financial inclusion: evidence from world economies," International Journal of Development Issues, Emerald Group Publishing Limited, vol. 19(2), pages 217-228, April.
    4. Ibrahim Bozkurt & Rıfat Karakuş & Melek Yildiz, 2018. "Spatial Determinants of Financial Inclusion over Time," Journal of International Development, John Wiley & Sons, Ltd., vol. 30(8), pages 1474-1504, November.
    5. Peter W. Muriu, 2021. "Does the Quality of Institutions Matter for Financial Inclusion? Cross Country Evidence," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 13(7), pages 1-27, June.
    6. Peterson K. Ozili, 2020. "Social inclusion and financial inclusion: international evidence," International Journal of Development Issues, Emerald Group Publishing Limited, vol. 19(2), pages 169-186, April.
    7. Peterson K. Ozili, 2021. "Financial inclusion research around the world: A review," Forum for Social Economics, Taylor & Francis Journals, vol. 50(4), pages 457-479, October.
    8. Nitin Kumar, 2013. "Financial inclusion and its determinants: evidence from India," Journal of Financial Economic Policy, Emerald Group Publishing Limited, vol. 5(1), pages 4-19, April.
    9. Peterson K. Ozili, 2018. "Impact of digital finance on financial inclusion and stability," Borsa Istanbul Review, Research and Business Development Department, Borsa Istanbul, vol. 18(4), pages 329-340, December.
    10. Ongo Nkoa, Bruno Emmanuel & Song, Jacques Simon, 2020. "Does institutional quality affect financial inclusion in Africa? A panel data analysis," Economic Systems, Elsevier, vol. 44(4).
    11. Nitin Kumar, 2013. "Financial inclusion and its determinants: evidence from India," Journal of Financial Economic Policy, Emerald Group Publishing Limited, vol. 5(1), pages 4-19, April.
    12. Minhaj Ali & Muhammad Imran Nazir & Shujahat Haider Hashmi & Wajeeh Ullah, 2022. "Financial Inclusion, Institutional Quality And Financial Development: Empirical Evidence From Oic Countries," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 67(01), pages 161-188, March.
    13. Ozili, Peterson Kitakogelu, 2018. "Impact of Digital Finance on Financial Inclusion and Stability," MPRA Paper 84771, University Library of Munich, Germany.
    14. Rania Mousa & Peterson K. Ozili, 2022. "Reimagining financial inclusion in the post COVID-19 world: the case of Grameen America," International Journal of Ethics and Systems, Emerald Group Publishing Limited, vol. 39(3), pages 532-556, June.
    15. Oliver Marnet, 2005. "Behavior and Rationality in Corporate Governance," Journal of Economic Issues, Taylor & Francis Journals, vol. 39(3), pages 613-632, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    financial inclusion; corporate governance; financial institutions;
    All these keywords.

    JEL classification:

    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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