Corporate governance and financial inclusion

Peterson Ozili

MPRA Paper from University Library of Munich, Germany

Abstract: This paper examines the association between corporate governance and financial inclusion in terms of correlation and causation. It examines whether countries that have a strong corporate governance environment also have better financial inclusion outcomes. The indicators of financial inclusion are automated teller machines (ATMs) per 100,000 adults, bank accounts per 1,000 adults and bank branches per 100,000 adults, while the indicators of corporate governance are extent of corporate transparency index, the extent of director liability index, the extent of disclosure index, the extent of ownership and control index, the extent of shareholder rights index, minority investors protection index and ease of shareholder suits index. The data were analyzed using Pearson correlation and granger causality tests. The results indicate that strong corporate governance is significantly correlated with better financial inclusion outcomes. The regional analyses show that corporate governance has a significant positive association with financial inclusion in Asian countries and in Middle East countries. However, a positive and negative association was observed between some indicators of corporate governance and financial inclusion in European countries, North American countries, South American countries, African countries and in Middle East and North Africa countries (MENA) countries, implying that strong corporate governance has a positive and negative association with financial inclusion depending on the indicators of corporate governance and financial inclusion used. There is also evidence of uni-directional granger causality between corporate governance and financial inclusion.

Keywords: financial inclusion; corporate governance; financial institutions (search for similar items in EconPapers)
JEL-codes: M12 M14 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-ban, nep-cfn, nep-fle, nep-pay and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Journal Article: Corporate governance and financial inclusion (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:118799

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