Economic Uncertainty in Developing Countries: Does Financial Inclusion Matter?

Oueghlissi Rim
Additional contact information
Oueghlissi Rim: University of Jendouba (FSJEG, Economics Department) and ECSTRA (IHEC, University of Carthage), Tunisia

Journal of Economic Integration, 2025, vol. 40, issue 4, 655-676

Abstract: The global expansion of financial inclusion is a critical issue for policymakers around the world. However, its impact on economic uncertainty remains poorly understood. This paper addresses this gap by carefully considering self-selection bias and endogeneity in the relationship between financial inclusion and economic uncertainty. Using matching techniques, we examine whether the level of financial inclusion (i.e., the treatment) has a significant impact on economic uncertainty (i.e., the outcome). Analyzing a sample of 99 developing countries over the period 2004-2018 and employing two matching techniques, we find that the average treatment effect of financial inclusion on economic uncertainty is negative and statistically significant, suggesting that countries with higher financial inclusion experience lower economic uncertainty. These robust results, across various empirical specifications, highlight the important role of inclusive financial systems in mitigating economic uncertainty in developing countries.

Keywords: Financial Inclusion; Economic Uncertainty; Entropy Balancing; PSM; Developing Countries (search for similar items in EconPapers)
JEL-codes: C78 D8 E44 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.e-jei.org/current/index.php?vol=40&no=4

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:ris:integr:021799

DOI: 10.11130/jei.2025014

Access Statistics for this article

Journal of Economic Integration is currently edited by Jungsuk Kim

More articles in Journal of Economic Integration from Center for Economic Integration, Sejong University Contact information at EDIRC.
Bibliographic data for series maintained by JEI ().