Financial Inclusion: New Measurement and Cross-Country Impact Assessment

Cyn-Young Park () and Rogelio Mercado

No 539, ADB Economics Working Paper Series from Asian Development Bank

Abstract: This paper introduces a new index of financial inclusion for 151 economies using principal component analysis to compute weights for aggregating nine indicators of access, availability, and usage. It then assesses the impact of financial inclusion on poverty and income inequality. The results provide evidence that high- and middle-high-income economies with high financial inclusion have significantly lower poverty, while no such relation exists for middle-low and low-income economies. The nonlinearities in the cross-country determinants and impacts of financial inclusion on poverty and income inequality across income groups are important to choosing the appropriate policies for achieving inclusive growth in different development stages.

Keywords: financial inclusion; income inequality; poverty (search for similar items in EconPapers)
JEL-codes: G18 O11 O16 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2018-03-15
New Economics Papers: this item is included in nep-fdg, nep-fle and nep-sea
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Citations: View citations in EconPapers (14)

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Related works:
Working Paper: Financial Inclusion: New Measurement and Cross-Country Impact Assessment (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:adbewp:0539

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