Financial Inclusion, Institutional Quality and Financial Development: Empirical Evidence from OIC Countries

2019 ◽  
Author(s):  
Minhaj Ali ◽  
Muhammad Imran Nazir ◽  
Shujahat Haider Hashmi ◽  
Wajeeh Ullah
Keyword(s):  
Empirical Evidence ◽  
Financial Development ◽  
Institutional Quality ◽  
Financial Inclusion

FINANCIAL INCLUSION, INSTITUTIONAL QUALITY AND FINANCIAL DEVELOPMENT: EMPIRICAL EVIDENCE FROM OIC COUNTRIES

2021 ◽  
pp. 1-28
Author(s):  
MINHAJ ALI ◽  
MUHAMMAD IMRAN NAZIR ◽  
SHUJAHAT HAIDER HASHMI ◽  
WAJEEH ULLAH
Keyword(s):  
Financial Development ◽  
Method Of Moments ◽  
Positive Impact ◽  
Generalized Method Of Moments ◽  
Institutional Quality ◽  
Financial Inclusion ◽  
Moderation Effect ◽  
The Relationship ◽  
Unique Study

This unique study examines the moderation effect of institutional quality (IQ) on the relationship between financial inclusion (FI) and financial development (FD) of 45 Organization of Islamic Cooperation (OIC) countries. For empirical analysis, panel data are used for the period 2000–2016. We use the Arellano–Bond generalized method of moments (GMM) and two-stage least-squares (2SLS) method in our estimations to draw multidimensional results. The empirical results confirm the significant positive relationship between FI, IQ and FD. Interestingly, we find that IQ moderates FI and has a significant positive impact on FD. Our findings are robust to alternative econometric specifications of FI, IQ and FD. Therefore, policymakers must sensibly understand the pivotal role of FI and IQ in establishing sustainable future development of OIC countries.

scholarly journals Institutional Quality and Financial Sector Development: Empirical Evidence from Nigeria

2018 ◽  
Vol 7 (1) ◽  
pp. 1 ◽  
Author(s):  
Fisayo Fagbemi ◽  
John Oluwasegun Ajibike
Keyword(s):  
Empirical Evidence ◽  
Financial Development ◽  
Good Governance ◽  
Developing Economies ◽  
Institutional Quality ◽  
Financial Sector ◽  
African Countries ◽  
Financial Sector Development ◽  
Long Run ◽  
Short Run

In view of the indispensable role of financial sector in both emerging and developing economies, there has been a notable spotlight on the financial sector development over the years in most African countries. Nonetheless, there are only a few studies on this topical issue, particularly for Nigeria. Hence, this study examines the long – run and short – run dynamic relationship between institutional quality and financial development in Nigeria over the period of 1984 – 2015 using Auto-Regressive Distributed Lag (ARDL) bounds test approach to cointegration. Using two different indicators (Private credit and M2) of financial development, the results consistently show that institutional factors do not have significant effect on financial development in the long – run as well as in the short – run. Furthermore, the empirical evidence indicates that regulatory quality and governance system (institutions) do not necessarily contribute to financial development in a feeble institutional environment, specifically in Nigeria. Thus, our findings suggest that whilst weak institutions could increase the risk of limiting the functioning of financial system, good governance and strong institutions are the essential ingredient of financial development in Nigeria. As a consequence, policies aimed at strengthening the quality of institutions and governance should form the major policy thrust of government (policy makers). These could help improving financial sector development in Nigeria.

scholarly journals Sustainable Utilization of Financial and Institutional Resources in Reducing Income Inequality and Poverty

2021 ◽  
Vol 13 (3) ◽  
pp. 1038
Author(s):  
Atta Ullah ◽  
Zhao Kui ◽  
Saif Ullah ◽  
Chen Pinglu ◽  
Saba Khan
Keyword(s):  
Economic Growth ◽  
Income Inequality ◽  
Financial Development ◽  
Institutional Quality ◽  
Vital Role ◽  
Electronic Government ◽  
Sustainable Utilization ◽  
One Belt One Road ◽  
Institutional Resources ◽  
Belt And Road

This study aims to determine the role of globalization, electronic government, financial development, concerning the moderation of institutional quality in reducing income inequality and poverty in One Belt One Road countries. The electronic government and regional integration of the economies of the One Belt One Road countries has increased globalization and can play a vital role in reducing income inequality and poverty. However, this globalization and digital transformation of government systems can only be beneficial in the presence of good institutional quality. The sample includes 64 One Belt One Road countries from 2003 to 2018. We employed a two-step system generalized method of moment (Sys-GMM) and a robustness check through Driscoll–Kraay standard errors regression. Our findings show that globalization, economic growth, e-government development, government expenditure, and inflation have a statistically significant and negative impact on income inequality and are key to eradicating income inequality and poverty. On the other hand, financial development, gross capital formation, and population size positively influence income inequality, which causes an increase in poverty and income inequality as financial development and population levels increase. Moderating variable institutional quality also positively impacts income inequality, which means that institutional quality in Belt and Road Countries is weak, as they are mostly developing countries that need to improve their systems. Moreover, the marginal effect also revealed that institutional quality has a corrective effect on the factors’ relationship with income inequality. Our findings endorse and conclude that globalization and e-government development improve economic growth and eradicate poverty and income inequality by boosting digitalization, investments, job creation, and wage increases for semi-skilled and unskilled human capital in Belt and Road countries. The sustainable utilization of financial and institutional resources plays a vital role in reducing income inequality and poverty in Belt and Road countries.

Asymmetric Impact of Institutional Quality on Environmental Degradation: Evidence of the Environmental Kuznets Curve

2021 ◽  
Vol 13 (22) ◽  
pp. 12507
Author(s):  
Farrah Dina Abd Razak ◽  
Norlin Khalid ◽  
Mohd Helmi Ali
Keyword(s):  
Financial Development ◽  
Environmental Degradation ◽  
Environmental Kuznets Curve ◽  
Energy Use ◽  
Institutional Quality ◽  
Kuznets Curve ◽  
Distributed Lag ◽  
Distributed Lag Model ◽  
Lag Model ◽  
New Guidelines

This paper aims to discover the asymmetry impacts and co-integration between gross domestic product, financial development, energy use and environmental degradation by featuring institutional quality covering the Malaysia economy during the period from 1984 until 2017 using a nonlinear auto-regressive distributed lag model. The results confirm the existence of the Environmental Kuznets Curve hypothesis for both linear and nonlinear analyses, thus verifying the relevance of symmetric and asymmetric EKC hypotheses for Malaysia. Further, this study verifies the attributes of financial development and institutional quality that mitigates the concern on CO2 emissions, but contradicting results were produced on energy use. The implication of this finding provides new guidelines for Malaysia authorities to consider the asymmetries in formulating environment-related policies to maintain environmental quality and achieve their sustainable development goals.

scholarly journals Natural Resources, Institutional Quality and Financial Development in GCC Member Countries: Visiting ‘Resource Curse Hypothesis’ by DCCE Estimation

2021 ◽  
Vol 7 (2) ◽  
pp. 131-145
Author(s):  
Muhammad Faheem ◽  
Imran Sharif Chaudhry ◽  
Sadam Hussain
Keyword(s):  
Financial Development ◽  
Natural Resource ◽  
Structural Breaks ◽  
Turning Point ◽  
Resource Curse ◽  
Institutional Quality ◽  
Resource Rent ◽  
Study Results ◽  
Resource Hypothesis ◽  
Natural Resource Rent

The main purpose of the study is to check whether natural resource rent affects the financial development or supporting the resource curse hypothesis by employing a recently developed estimation technique by Chudik and Pesaran (2015) from 1985 to 2017 in GCC member countries. The novelty of this methodology is to consider structural breaks and the heterogeneity issues that are common in panel data. The results of DCCE estimates are in support of the resource hypothesis that natural resource rent hurt financial development.  Additionally, this study takes moderation of institutional quality to check the threshold point or turning point where the natural resource rent effect becomes positive. Our results of interaction term postulate that a higher level of institutional quality mitigates the adverse effect of natural resource rent on financial development. The study results recommend the policy of natural resource rent in the presence of high institutional quality should continue because it improves the financial development in GCC member countries.

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