The role of ICT diffusion and institutional quality on financial inclusion in Asian region: empirical analysis using panel quantile regression

Samia Nasreen (), Faryal Ishtiaq () and Aviral Tiwari
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Samia Nasreen: Lahore College for Women University
Faryal Ishtiaq: Government of the Punjab

Electronic Commerce Research, 2025, vol. 25, issue 3, No 13, 1685-1752

Abstract: Abstract The diffusion of information and communication technology (ICT) has transformed the financial sector. Nowadays, ICT applications are widely used in the banking sector. Moreover, institutional quality contributes positively to the integrity of financial institutions. However, in the empirical literature, little evidence is provided about the role of ICT and institutional quality in increasing financial inclusion, especially in Asian countries. Therefore, the present research aims to fill this gap in the literature by examining the impact of ICT diffusion and institutional quality on financial inclusion in 22 Asian economies using annual data covering the period from 2004 to 2020. We have applied an innovative panel quantile regression model introduced by Powell (Quantile Treat Eff 1(28), 2016) for empirical analysis. The empirical findings show the significant effect of ICT diffusion and institutional quality on aggregated and disaggregated measures of financial inclusion, thus, confirming the importance of ICT diffusion and institutional quality in promoting financial inclusion as well as penetration, accessibility and usage of financial services in the Asian region. Furthermore, GDP per capita, urbanization and remittances are found to significantly determine financial inclusion in developing Asian countries. From the policy perspective, it is suggested that policies that enhance financial inclusion by promoting digital finance and strengthening the country’s institutions should be formulated.

Keywords: Financial inclusion; ICT; Institutional quality; Panel quantile regression; Asia (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10660-023-09727-z

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