Foreign direct investment and inclusive finance: do financial markets and quality of institutions matter?
Joshua Yindenaba Abor,
Richard Adjei Dwumfour,
Elikplimi Komla Agbloyor
et al.
Abstract:We examine the impact of foreign direct investment (FDI) on financial inclusion. To identify the causal effect of FDI on financial inclusion, we use plausibly exogenous source of variations in bilateral investment treaties (BITs) as a novel instrumental variable (IV) for net FDI inflows. Using annual data for a broad panel of 90 countries over the period 2004 to 2017, our results show that FDI improves financial inclusion for both “access to finance" and “use of financial services". This impact is more pronoun… Show more
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