National Culture and Financial Inclusion: Evidence from Belt and Road Economies

Idrees Liaqat, Yongqiang Gao, Faheem Ur Rehman, Zoltán Lakner and Judit Oláh
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Idrees Liaqat: School of Management, Huazhong University of Science and Technology, Wuhan 430074, China
Yongqiang Gao: School of Management, Huazhong University of Science and Technology, Wuhan 430074, China
Faheem Ur Rehman: Laboratory of International and Regional Economics, Graduate School of Economics and Management, Ural Federal University, Mira 19, 620002 Ekaterinburg, Russia
Zoltán Lakner: Department of Food Economics, Faculty of Food Science, Hungarian University of Agriculture and Life Science, 2100 Gödöllő, Hungary
Judit Oláh: Faculty of Economics and Business, University of Debrecen, 4032 Debrecen, Hungary

Sustainability, 2022, vol. 14, issue 6, 1-21

Abstract: Financial Inclusion is a key factor in achieving the sustainable development goals of the United Nations. The research in the area of financial inclusion is becoming more critical for scholars and policymakers. In previous studies, effects of formal institutions on financial inclusion have been explored. However, influence of informal institutions (culture) on financial inclusion remained untapped. To fill this gap, we investigate how national culture affects the financial inclusion of 81 Belt and Road economies using 17 years of data from 2004 to 2020. The empirical findings of the two-stage least square (2SLS) show that Hofstede’s cultural dimensions are significantly associated with financial inclusion with different signs and levels of magnitude. We find that financial inclusion is lower in countries where uncertainty avoidance and power distance is high and that the opposite is true for individualism and masculinity. The overall results are reliable to a series of robustness checks and provide a useful basis for policymakers, regulatory agencies, and other stakeholders in achieving the sustainable development goal of financial inclusion in Belt and Road countries.

Keywords: financial inclusion; culture; individualism; uncertainty avoidance; Belt and Road (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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