The interconnectedness of financial inclusion and bank profitability in rising economic powers
Evidence from heterogeneous panel analysis
Bibliographic Data
| ID | 21515910 |
|---|---|
| Authors | Yanqi Wang (0009-0009-5081-7653, Neusoft (China)), Muhammad Ali (0009-0001-0662-7117, UCSI University), Asadullah Khaskheli (0000-0002-1720-8022, Hainan University), Komal Akram Khan (0000-0003-1520-5255, Iqra University), Chin-Hong Puah (0000-0003-0187-7413, Universiti Malaysia Sarawak) |
| Year | 2023 |
| Volume | 50 |
| Issue | 9 |
| Pages | 1217-1231 |
| Publication date | 2023-08-28 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | International Journal of Social Economics (JOURNAL) |
| Journal identifiers | ISSN: 0306-8293 • E-ISSN: 1758-6712 |
| Publisher | Emerald (PUBLISHER) |
| DOI | 10.1108/ijse-05-2022-0364 |
| OpenAlex | W4313214030 |
| Language | EN |
| Citations received | 2 |
| References cited | 35 |
Purpose The objective is to assess the relationship between financial inclusion and bank profitability in emerging economies, i.e. “Bangladesh, Egypt, Indonesia, Mexico, Nigeria, Pakistan, Philippines, and Vietnam”. Design/methodology/approach The second-generation econometrics of panel data has been applied to examine the cross-section independence and control the heterogeneity between cross sections. Additionally, the authors employ the following tests for the analysis: “the unit root test, Westerlund's (2007) bootstrap cointegration, Pedroni cointegration, fully modified ordinary least square (FMOLS), and heterogeneous panel causality techniques”. The annual data consist of the period from 2000 to 2019. Findings The findings reveal that financial inclusion fosters bank profitability. Therefore, easier access to financial services and products will maximize banks' profitability. Additionally, the association between financial inclusion and bank profitability is unidirectional. Originality/value This research is a first attempt to bring a novel contribution to the subject of emerging economies by investigating the association between financial inclusion and bank profitability. Another unique addition to the literature is the use of a novel financial inclusion index. At last, a panel cointegration technique, FMOLS and heterogeneous panel non-causality tests are taken into consideration for the in-depth analysis
Cointegration · Econometrics · Economics · Financial inclusion · Financial services · Macroeconomics · Ordinary least squares · Panel data · Profitability index · Unit root · Banking stability, regulation, efficiency · Islamic Finance and Banking Studies · Microfinance and Financial Inclusion · Finance
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| Unique citing works | 2 |
|---|---|
| Citations per year | 1 |
| Citation span | 2024 - 2025 (2) |
| Citation velocity | recent |
| Highly cited | No |
| Citation types | Neutral: 1 |