Effects of Financial Inclusion on Economic Growth, Poverty, Sustainability, and Financial Efficiency: Evidence from the G20 Countries

Nasir Khan (), Mahwish Zafar, Abiodun Okunlola, Zeman Zoltan and Magda Robert
Additional contact information
Nasir Khan: IBMS, The University of Agriculture Peshawar, Peshawar 25130, Pakistan
Mahwish Zafar: Faculty of Business and Management Science, Superior University Lahore, Lahore 54000, Pakistan
Zeman Zoltan: Research Center, Hungarian National Bank, John von Neumann University, Izsáki út 10, 6000 Kecskemét, Hungary
Magda Robert: Research Center, Hungarian National Bank, John von Neumann University, Izsáki út 10, 6000 Kecskemét, Hungary

Sustainability, 2022, vol. 14, issue 19, 1-19

Abstract: The main purpose of this study is to scrutinize the effect of financial inclusion on financial sustainability, financial efficiency, gross domestic product, and human development in the context of G20 nations. This study has employed annual data of 15 developed and emerging economies during the period from 2004 to 2017. The current study has utilized a single index for financial inclusion, financial sustainability, and financial efficiency by employing principal composite analysis (PCA). The outcomes of the panel stationarity test confirmed the ARDL model for both the long and short runs. Equally, the findings of the ARDL Model 1 showed no association between financial inclusion and financial sustainability in the short run, however, in the long run, inclusive finance showed a significant impact on sustainability. Likewise, the ARDL Model 2 showed that financial inclusion has no effect on efficiency in the short run, while it positively influenced financial efficiency in the long run. The results of the ARDL Model 3 are also similar to Models 1 and 2 where inclusive finance showed no effect on poverty in the short run, but a significant effect in long run. Similarly, the ARDL Model 4 also presented no association between GDP and inclusive finance in the short run, while it showed significant relationships in the long run. Moreover, the outcomes of the GMM Model 1 showed a significant impact of inclusive finance on financial stability, and these results were similar to the GMM Model 2 between financial inclusion and financial efficiency. Additionally, GMM Models 3 and 4 have shown that inclusive finance has a statistically significant impact on poverty and economic expansion, respectively. The outcomes of this article are essential for policymakers, academics, regulators, and practitioners with valuable and convincing debate over financial inclusion, economic growth, poverty, sustainability, and financial efficiency.

Keywords: financial Inclusion; sustainability; financial efficiency; economic growth; poverty; ARDL; fixed and random effect; GMM; G20 nations (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 (9)

Downloads: (external link)
https://www.mdpi.com/2071-1050/14/19/12688/pdf (application/pdf)
https://www.mdpi.com/2071-1050/14/19/12688/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:14:y:2022:i:19:p:12688-:d:934401

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().