Work

The impact of financial literacy on financial development: A cross-country analysis

Year: 2025

Type: article

Abstract: This study investigates the impact of financial literacy on financial development across a large set of countries, utilizing data from the Global Financial Inclusion and Consumer Protection (GFICP) surveys conducted in 2017 and 2022. Using baseline OLS regressions, the results reveal that financial literacy significantly enhances financial development, particularly in upper-middle-, lower-middle-, and low-income countries. The study also highlights regional variations, with the East Asia and Pacific region demonstrating the most substantial positive relationship. Additionally, the quantile regression analysis indicates that the effect of financial literacy on financial development is more pronounced in countries with either highly developed or underdeveloped financial systems. These results underscore the importance of designing context-specific financial education policies, particularly in developing economies, where improvements in foundational financial knowledge can play a catalytic role in strengthening financial systems.

Source: Borsa Istanbul Review

DOI: 10.1016/j.bir.2025.10.017

Authors: Asuman Koç Yurtkur, Yunus Kilic, Mehmet Fatih Bugan, Sel Dibooglu, Emrah I. Cevik

Institutions: Zonguldak Bülent Ecevit University, Akdeniz University, Gaziantep University, Missouri Western State University, Tekirdağ Namık Kemal University

Language: English

Topic: Financial Literacy, Pension, Retirement Analysis

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Decent work and economic growth, Partnerships for the goals

Open Access status: gold

Estimated APC paid: $1,500