Financial Inclusion, Institutional Quality and Financial Development: Empirical Evidence From Oic Countries

Nazir, Muhammad Imran; Xia, Enjun; Ullah, Wajeeh

doi:10.1142/s0217590820420084

Cited by 44 publications

(29 citation statements)

References 72 publications

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“…The aforementioned synopsis of the literature suggests that studies on the subject matter have primarily focused on industry/institution-specific factors with diverse conclusions based on the jurisdiction of the study. Studies that have however looked at governance and regulatory structures and their influence on financial institutions have focused on the impacts such factors have on the development of the financial sector as a whole (refer to Law and Azman-Saini, 2012; Barry and Tacneng, 2014; Le et al , 2016; Kutan et al , 2017; Khan et al , 2019; Djeri et al , 2020; Khan et al , 2020; Agoba et al , 2020; Khan et al , 2020; Ali et al , 2021). This study proposes a different approach.…”

Section: Literature Reviewmentioning

confidence: 99%

Institutional quality, macroeconomic uncertainty and efficiency of financial institutions in Sub-Saharan Africa

Abaidoo

Agyapong²

2022

JFRC

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Purpose This paper evaluates how institutions of governance and macroeconomic uncertainty influence efficiency of financial institutions in the subregion of Sub-Saharan Africa (SSA). Data for the empirical inquiry were compiled from relevant sources for 33 countries in the subregion from 2002 to 2019. Empirical estimates verifying hypothesized relationships were carried out using the continuous updating estimator (CUE) by Hansen et al. (1996). Design/methodology/approach The purpose of this paper is to evaluates how institutions of governance and macroeconomic uncertainty influence efficiency of financial institutions in the subregion of Sub-Saharan Africa (SSA). Data for the empirical inquiry were compiled from relevant sources for 33 countries in the subregion from 2002 to 2019. Empirical estimates verifying hypothesized relationships were carried out using the continuous updating estimator (CUE) by Hansen et al. (1996). Findings The results suggest that institutional quality has significant positive effect on financial institution efficiency, supporting the view that improved and supportive structures of governance tend to promote operational efficiency among financial institutions among economies in SSA. In addition, improvement in individual governance indicators such as corruption control, government effectiveness, regulatory quality and rule of law was also found to support or enhance efficiency of financial institutions among economies in the subregion. Macroeconomic uncertainty on the other hand is found to impede efficiency of financial institutions; the same condition (macroeconomic uncertainty) is further found to negate any positive impact corruption control, government effectiveness, regulatory quality and rule of law have on operational efficiency among financial institutions in the subregion. Originality/value Unlike most of related studies, this study adopts a different approach on the dynamics of financial institutions. Approach pursued in this empirical inquiry examines how the regulatory environment within which financial institutions operate, the form of governance and the quality of government institutions influence efficiency of financial institutions among emerging economies in Sub-Sahara. Empirical analysis conducted examines effects of variables that are unique to this study; these variables are either constructed or econometrically derived specifically for various interactions verified in the study. For instance, institutional quality variable is an index constructed specifically for this study using principal component analysis approach.

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Section: Literature Reviewmentioning

confidence: 99%

Institutional quality, macroeconomic uncertainty and efficiency of financial institutions in Sub-Saharan Africa

Abaidoo

Agyapong²

2022

JFRC

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“…Several empirical studies examine the direct effect of institutional quality on financial inclusion while other studies control for the effect of institutional quality while investigating the determinants of financial inclusion (e.g. Ali et al (2021) 2000 to 2016. They find a significant positive relationship between institutional quality, financial inclusion and financial development.…”

Section: Literature Reviewmentioning

confidence: 99%

“…In the literature, there has been much emphasis on the effect of institutional quality on the level of financial inclusion (e.g. Ali et al, 2021;Xu, 2020;Evans, 2018;Lashitew et al, 2019;Nguyen and Ha, 2021;Anthony-Orji et al, 2019;Nkoa and Song, 2020;Ouechtati, 2022;Kebede et al, 2021;Kwenda and Chinoda, 2019;Aracil et al, 2022;and Eldomiaty et al, 2020). These studies control for the effect of institutional quality on the level of financial inclusion.…”

Section: Introductionmentioning

confidence: 99%

Institutional Theory of Financial Inclusion

Ozili¹

2023

SSRN Journal

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“…Financial inclusion is a crucial element of financial development in terms of supporting the financial sector and institutions. It is also thought to be extremely important for fostering economic growth (Ali et al, 2021). Thus, a nation's high rate of financial inclusion can also be viewed as a measure of its economic stability.…”

Section: Theoretical and Empirical Reviewmentioning

confidence: 99%

The role of institutional quality in assessing the environmental externality of financial inclusion: A DCCE approach

Latif

Safdar

Liaquat

et al. 2023

Front. Environ. Sci.

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Controlling environmental contamination requires the use of environmental regulation. The growth of green finance depends on digital finance. The objectives of the study are threefold: first, to explore the impact of digital financial inclusion in deriving climate change; second, to trace the shape of the financial inclusion-based environmental Kuznets curve; and third, to investigate the intersecting effect of digital financial inclusion and institutional quality on environmental quality. Using panel data from 48 Asian economies between 1996 and 2020, heterogeneity, non-stationarity, and cross-sectional dependence are addressed using an econometric method called “dynamic common correlated effects (DCCE).” The empirical evidence confirms a significant relationship between environmental performance and financial inclusiveness. Furthermore, the findings also validated the inverted U-shape environmental Kuznets curve based on financial inclusiveness. Our research suggests that a strong institutional framework has the potential to mitigate the long-term negative consequences of financial inclusion on the environment. To establish coordinated control of environmental quality, the government fully utilizes the environmental regulation and digital inclusive finance environmental governance. Consequently, to achieve environmental sustainability, policymakers in Asian countries should develop policies that enhance financial inclusion and institutional quality.

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Financial Inclusion, Institutional Quality and Financial Development: Empirical Evidence From Oic Countries

Cited by 44 publications

References 72 publications

Institutional quality, macroeconomic uncertainty and efficiency of financial institutions in Sub-Saharan Africa

Institutional quality, macroeconomic uncertainty and efficiency of financial institutions in Sub-Saharan Africa

Institutional Theory of Financial Inclusion

The role of institutional quality in assessing the environmental externality of financial inclusion: A DCCE approach

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