Can financial inclusion reduce the presence of corruption? Evidence from selected countries in Africa

Ajide, Folorunsho M.

doi:10.1108/ijse-03-2020-0145

Cited by 17 publications

(29 citation statements)

References 55 publications

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“…In line with theoretical prescriptions and previous empirical studies (see Adjasi et al, 2012; Ford et al, 2008; Yang, 2008), we specify the following model:

{Growth}_{it} goodbreak= β_{0} goodbreak+ β_{1} {FDI}_{it} goodbreak+ β_{2} {AMLR}_{it} goodbreak+ β_{3} {(FDI * AMLR)}_{it} goodbreak+ β_{4} Z_{it} goodbreak+ μ_{i} goodbreak+ v_{t} goodbreak+ ε_{it}

where

{Growth}_{it}

represents economic growth of country i in time t . In line with previous empirical works (see Ajide, 2020; Nirola & Sahu, 2019; Polizzi et al, 2020), we measure economic growth using the growth of real GDP per capita. GDP per capita income represents the distribution of wealth within the economy as compared to the GDP growth rates.…”

Section: Methodsmentioning

confidence: 94%

“…where Growth it represents economic growth of country i in time t. In line with previous empirical works (see Ajide, 2020;Nirola & Sahu, 2019;Polizzi et al, 2020), we measure economic growth using the growth of real GDP per capita. GDP per capita income represents the distribution of wealth within the economy as compared to the GDP growth rates.…”

Section: Empirical Model Specificationmentioning

confidence: 99%

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Foreign direct investment, anti‐money laundering regulations and economic growth

Ofoeda

Agbloyor

Abor

et al. 2022

J of Intl Development

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This study seeks to establish the impact of anti-money laundering (AML) regulations on economic growth as well as how AML regulations influence the foreign direct investment (FDI)-growth nexus for 165 economies across the globe. We employ Prais-Winsten and the Hansen (2000) panel threshold regression estimation techniques to test the hypotheses of the study. We use data ranging from 2012 to 2018. We provide evidence that AML regulations generally stimulate growth; however, AML regulations only stimulate growth below the threshold value. Again, although we report that FDI stimulates growth, the growth-enhancing impact of FDI is more pronounced at higher levels of AML regulations.

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“…In line with theoretical prescriptions and previous empirical studies (see Adjasi et al, 2012; Ford et al, 2008; Yang, 2008), we specify the following model:

{Growth}_{it} goodbreak= β_{0} goodbreak+ β_{1} {FDI}_{it} goodbreak+ β_{2} {AMLR}_{it} goodbreak+ β_{3} {(FDI * AMLR)}_{it} goodbreak+ β_{4} Z_{it} goodbreak+ μ_{i} goodbreak+ v_{t} goodbreak+ ε_{it}

where

{Growth}_{it}

Section: Methodsmentioning

confidence: 94%

Section: Empirical Model Specificationmentioning

confidence: 99%

Foreign direct investment, anti‐money laundering regulations and economic growth

Ofoeda

Agbloyor

Abor

et al. 2022

J of Intl Development

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“…Their study of 63 countries showed a positive relation with economic growth. Ajide (2020) studied the bearing of financial inclusion on corruption in 13 African countries. The study conducted on the data from 2005 to 2016 found that achieving a threshold level of financial inclusion helps control corruption.…”

Section: Literature Reviewmentioning

confidence: 99%

Determinants of financial inclusion in gulf cooperation council countries

Uddin

Ahmad

Dar

et al. 2023

IJAEFA

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The primary purpose of this study is to investigate the determinants of financial inclusion in the Gulf Cooperation Council (GCC) countries. For this study, we used the Global Findex Database 2017. Since the study variables are binary, we used the Probit method to estimate the results. Our findings show that the number of people who reported having a formal financial institution account increased by 16 percent between 2011 and 2017. At the same time, formal saving and formal borrowing were low in GCC countries compared to the average of high-income countries’ average. We also found that financial inclusion is higher for males, older people, more educated people, and higher-income people, while women and younger people are less likely to be financially included in GCC countries. Therefore, FI efforts in GCC should focus on the young and women population as they are most likely to be excluded from the formal financial system. Therefore, tailored products and services that meet the needs of these groups should be designed and promoted to improve FI among them so that their access to and use of financial services are enhanced.

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“…A previous study by Setor et al (2021) confirms that digital payments contribute to corruption control in 111 developing countries, however, the authors did not identify the specific modality of digital payment (credit card, debit card, internet banking, mobile banking) that drives corruption control, nor did they consider financial inclusion in the study, which we believe is one of the relevant factors for wider use of digital payments. Likewise, Ajide (2020) shows that financial inclusion reduces corruption in 13 African countries, however, the study does not consider the relevance of financial innovation in the link between…”

Section: Introductionmentioning

confidence: 96%

“…Financial innovation, specifically digital payments, improves financial transparency, reduces information asymmetry and uncertainty, and proves to be a great opportunity to control corrupt activities (Jamil et al, 2022;Setor et al, 2021). For example, salary banking greatly reduces ghost employees and corruption (Ajide, 2020(Ajide, , 2021. Low levels of education are a major barrier to financial inclusion and innovation in Africa and other developing countries (Mukherjee and Sood, 2020).…”

Section: Introductionmentioning

confidence: 99%

Controlling corruption in African countries: innovation, financial inclusion and access to education as alternative measures

Jungo

Madaleno²,

Botelho³

2023

IJSE

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PurposeThis study aims to examine the impact of financial inclusion and financial innovation on corruption, considering the moderating role of education, as well as identify the specific modality of digital inclusion and payments that contribute to corruption reduction.Design/methodology/approachThe study uses a representative sample consisting of 46 African countries in three different years 2011, 2014 and 2017. On the data, feasible generalized least squares (FGLS), instrumental variables – two stages least squares (IV-2SLS) and two-stage generalized method of moments (IV-2GMM) model estimation methods were employed.FindingsThe results suggest that financial inclusion and education significantly reduce corruption. As well, the interaction between financial inclusion and education reduces corruption. Additionally, the authors find that the expansion of bank credit and the use of credit and debit cards are the specific modes of financial inclusion and digital payments that can contribute to corruption reduction.Research limitations/implicationsThis study awakens policymakers in African countries about the need to consider education as an alternative measure to support financial inclusion and reduce the use of physical cash in transactions for an effective fight against corruption.Practical implicationsRegarding practical implications, the study shows that financial inclusion besides reducing poverty for households can contribute to macroeconomic stability in Africa.Originality/valueThe study uses a representative sample composed of 46 African countries and considers the role of education in moderating the relationship between financial inclusion and financial innovation on corruption. Furthermore, the study identifies the specific modality of financial inclusion and digital payments that contribute to corruption reduction.

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Can financial inclusion reduce the presence of corruption? Evidence from selected countries in Africa

Cited by 17 publications

References 55 publications

Foreign direct investment, anti‐money laundering regulations and economic growth

Foreign direct investment, anti‐money laundering regulations and economic growth

Determinants of financial inclusion in gulf cooperation council countries

Controlling corruption in African countries: innovation, financial inclusion and access to education as alternative measures

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