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Institutional quality and the financial inclusion-poverty alleviation link: Empirical evidence across countries

Year: 2021

Type: article

Abstract: Institutional quality in the form of extractive or inclusive institutions influences economic outcomes. We examine the positive moderating effect of institutional quality on the relationship between financial inclusion and poverty alleviation over a sample of seventy-five developing and developed countries (2004–2017). We use six different financial inclusion measures together with an informal political institution variable, applying both cross-section and quantile analysis. We find that institutional quality intensifies the beneficial effects of financial inclusion on poverty rates. This effect is more pronounced in poorer economies than in wealthier ones. Our findings yield implications for policy makers seeking to tackle the institutional causes of poverty.

Source: Borsa Istanbul Review

DOI: 10.1016/j.bir.2021.03.006

Authors: Elisa Aracil, Gonzalo Gómez-Bengoechea, Olga Moreno-de-Tejada

Institutions: ESIC University, ESIC Business & Marketing School, Instituto de Investigación Tecnológica, Universidad Pontificia Comillas, Inter-American Development Bank

Language: English

Topic: Microfinance and Financial Inclusion

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: No poverty, Reduced inequalities, Decent work and economic growth

Open Access status: gold

Estimated APC paid: