EXPLORING THE LINK BETWEEN FINANCIAL INCLUSION AND FOOD SECURITY IN ALGERIA A VECM Approach1

Chetouane Hania, Boniface Ngah and Sonia Chetouane ()
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Chetouane Hania: Pan-African Institute for Development, African Academy of Sciences and University of Dschang, University of Ebolowa, Cameroon
Boniface Ngah: University of Yaoundé 1 = Université de Yaoundé I
Sonia Chetouane: UMSBJ - Université Mohammed Seddik Benyahia [Jijel] | University of Jijel

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Abstract: This study explores the link between financial inclusion and food security in Algeria from 2003 to 2022. Using a composite financial inclusion index and the Vector Error Correction Model (VECM), we analyse the data, subjecting it to various diagnostic tests. Surprisingly, our results reveal that financial inclusion (FI) has a significant and positive impact on undernourishment prevalence, indicating a negative effect on food security in both the short and long term. Likewise, food imports (FIM) contribute to higher undernourishment prevalence, implying a weakening of food security in the long-run. Conversely, unemployment rate (UEM) and food production (FOP) show no substantial long-term impact on food security, although UEM has an opposing effect in the short run, meaning it improves food security at the short term; which can be attributed to the informal economy and other State's policies. Notably, income per capita (INCAPITA) negatively affects undernourishment prevalence, improving food security. These findings offer a nuanced understanding of the complex relationship between financial inclusion and food security in Algeria, emphasizing the need for multifaceted, contextspecific policies to address the country's unique challenges.

Keywords: financial inclusion food security prevalence of undernourishment Vector Error correction model (VECM) Algeria JEL Classification Codes: B26 C58 D53 E44 L66; financial inclusion; food security; prevalence of undernourishment; Vector Error correction model (VECM); Algeria JEL Classification Codes: B26; C58; D53; E44; L66 (search for similar items in EconPapers)
Date: 2024-06-30
New Economics Papers: this item is included in nep-agr, nep-ara, nep-fdg and nep-fle
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Published in International Journal of Economic Performance - المجلة الدولية للأداء الاقتصادي, In press, 07 (01)

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