Fintech adoption and financial inclusion in emerging economies: the moderating role of institutional quality

Kais Ben Mbarek ()
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Kais Ben Mbarek: University of Jendouba

SN Business & Economics, 2025, vol. 5, issue 11, 1-22

Abstract: Abstract This study investigates how institutional quality moderates the relationship between fintech adoption and financial inclusion across 32 emerging economies from 2017 to 2023. Using a novel dataset combining Global Findex data, IMF financial access indicators, and World Bank governance metrics, we employ panel data techniques with instrumental variables to address endogeneity concerns. Our findings reveal that fintech adoption significantly enhances financial inclusion, but this effect is strongly conditioned by institutional quality. Countries with stronger regulatory frameworks, rule of law, and political stability experience 2.4 times greater financial inclusion benefits from similar levels of fintech penetration. We identify three critical institutional mechanisms that facilitate fintech’s impact: regulatory adaptability, contract enforcement, and corruption control. These results have important implications for policymakers seeking to leverage financial technology to expand access to financial services while highlighting the necessity of concurrent institutional reforms.

Keywords: Financial technology; Financial inclusion; Emerging markets; Institutional quality; Financial regulation; Mobile money (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s43546-025-00956-y

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