Examining financial inclusion-agricultural productivity connection in south asian countries: evidence from FMOLS and DOLS approaches

Abstract

The main purpose of this paper is to examine the impact of financial inclusion on agricultural productivity in South Asian countries from 2004 to 2018. By following the Human Development Index method, we construct a multidimensional time-varying financial inclusion index to measure the level of financial inclusion. The long-run elasticity of financial inclusion on agricultural productivity is examined by using the FMOLS and DOLS approaches. The empirical results confirm that financial inclusion has a positive impact on agricultural productivity. Furthermore, the interaction term between financial inclusion and human capital is positively associated with agricultural productivity. These results suggest that South Asian countries can increase agricultural productivity by improving the coverage of financial inclusion in the long run.