Purpose This study aims to empirically investigate the transformative role of sovereign wealth funds (SWFs) in advancing economic diversification within the Gulf Cooperation Council (GCC) countries. By estimating the interaction effect between SWFs and innovation, the authors seek to determine the extent to which the latter amplifies the former’s transformative impact on nonhydrocarbon sectors. This approach endeavors to quantify how the synergistic interplay between SWFs and innovation capacity potentiates optimal diversification outcomes, particularly within Gulf economies pursuing knowledge-intensive transformation under national visions (e.g. Saudi Vision 2030 and UAE Centennial 2071). Design/methodology/approach This study analyzes the contribution of SWFs to economic diversification in the GCC countries over the period 2008–2023. Methodologically, it uses a panel autoregressive distributed lag-pooled mean group estimator, which is uniquely suited to disentangle short-run dynamics from long-run equilibrium relationships in heterogeneous panels with mixed orders of integration. Furthermore, it rigorously examines the moderating role of innovation in potentiating SWFs’ efficacy as catalysts for economic diversification in the GCC countries. Findings The analysis empirically establishes SWFs as crucial conduits for venturing beyond an oil-based paradigm. However, their efficacy is by no means unconditional. The research uncovers a critical finding that innovation capacity exerts a statistically significant moderating influence, dynamically amplifying the SWFs’ impact on nonhydrocarbon sectors. This indicates that capital deployment achieves its fullest potential only when synergized with robust domestic innovation ecosystems. Originality/value Studies directly investigating the role of SWFs in fostering economic diversification within the GCC context remain strikingly scarce, virtually countable on the fingers of one hand – a lacuna our paper is expressly designed to redress. This study establishes an empirical foundation for scholarly inquiry into the synergistic nexus between SWFs and economic diversification in the GCC countries. Its principal originality lies in rigorously identifying innovation capacity as a critical moderator, a nuanced finding that reorients policy beyond mere capital allocation toward an integrated financial and technological strategy for a postoil future.
Purpose This study aims to examine the impact of public debt composition by creditor type on financial stability in Tanzania, using quarterly data and an autoregressive distributed lag (ARDL) model. Specifically, the analysis focuses on the roles of debt held by the central bank, commercial banks, pension funds and external creditors, with financial stability proxied by the capital adequacy ratio. Design/methodology/approach Using an ARDL model, this study examines the long-run and short-run effects of public debt held by the central bank, commercial banks, pension funds and external creditors, while controlling for key macroeconomic variables such as GDP growth, inflation, interest rates and foreign exchange reserves. Findings The results reveal that the identity of the creditor plays a critical role. In the long run, debt held by commercial banks is positively associated with financial stability. In contrast, debt held by external creditors and the central bank is linked to increased financial vulnerability. Pension fund holdings show no significant effect. Short-term findings suggest that sudden increases in commercial bank debt and declines in foreign reserves temporarily compromise financial stability. Originality/value These results underscore the significance of public debt size and its holders, providing crucial insights for designing debt management strategies that foster macrofinancial resilience in Tanzania.
Purpose This paper aims to investigate how innovation-oriented credit policies affect firm financing behavior in emerging economies, using China’s Promote Sci-Tech and Finance Integration initiative as a quasi-natural experiment. Design/methodology/approach Using an unbalanced panel of Chinese A-share firms from 2006 to 2020, this study estimates the policy effect with a staggered difference-in-differences (DID) design. Findings Rather than reducing reliance on informal finance, the policy led to increased use of trade credit, as subsidized loans were diverted along supply chains through receivables and prepayments. The effect is most pronounced among politically unconnected and non-high-tech firms, suggesting a strategic adaptation to credit incentives. Further analysis shows that firms engaged in research and development (R&D) reporting manipulation are more likely to channel funds toward short-term financial intermediation. Originality/value These findings highlight how institutional capacity, rather than credit availability alone, determines the success of financial reforms. The study offers broader implications for policy design across Asia-Pacific economies seeking to foster innovation through credit-based interventions.
Purpose This study aims to examine whether economic policy uncertainty (EPU), market volatility, global uncertainty and broader market movements affect India's IT sector consistently with the conventional adverse benchmark, or whether the sector exhibits a distinct response conditioned by export orientation, intangible-capital intensity and operational flexibility.Design/methodology/approach Using 201 monthly observations (April 2008-December 2024), an ARDL bounds-testing framework estimates long-run and short-run relationships between Nifty-IT, India's EPU index, India VIX, Nifty50 and GEPU, with extended-sample robustness to December 2025 (n = 213).Findings Domestic EPU exerts a positive and significant long-run association with Nifty-IT, indicating policy uncertainty is not uniformly adverse. Nifty50 shows a strong positive long-run effect with above-unity elasticity. Market volatility displays temporal asymmetry: the long-run VIX coefficient is positive in the primary sample but regime-conditional, while short-run lagged terms are individually negative but not jointly significant. GEPU is insignificant in the primary-sample long run but emerges as a significant negative long-run driver in the extended sample, suggesting that global uncertainty exposure is conditional rather than permanently absent.Practical implications Institutional flexibility and service-sector adaptability matter alongside uncertainty reduction. Domestic EPU is associated with long-run IT sector strength, but volatility and global uncertainty require horizon-specific risk assessment.Originality/value The average negative effect of uncertainty is conditional rather than universal. India's IT sector represents a plausible boundary case in which EPU, market volatility and global uncertainty affect performance through different channels and horizons.
Purpose The purpose of this study is to analyse the socio-demographic and economic determinants of financial inclusion (FI) in Afghanistan. Design/methodology/approach The study uses the Global Findex data 2021 and probit regression models to analyse determinants of various FI indicators and barriers. Findings The results reveal low levels of formal FI in Afghanistan. Account ownership is limited, and formal saving and borrowing are almost absent. In case of emergency sources of funds, there is a heavy reliance on informal networks. The regression results show that gender, education, income, employment and location are significant determinants of FI in Afghanistan, with variations across account ownership, savings, borrowing, barriers, emergency sources of funds and digital access and usage. Research limitations/implications The analysis could not account for conflict-related factors. Further studies are recommended. Practical implications Targeted interventions for women, mobile banking solutions, formal credit products, financial literacy programs, Islamic financial services and promoting practical use of financial services are recommended. Originality/value This study contributes to the literature by investigating the determinants of FI and barriers in Afghanistan using individual-level data from the 2021 Global Findex database.
Purpose Despite advancements in mobile technology, Fintech innovation and regulatory reforms, many Nigerians, especially in rural and low-income communities, remain excluded from the digital financial ecosystem. Additionally, rising digital risks (including cybercrime, online fraud, etc.) and poor digital infrastructure continue to erode users’ trust and exacerbate inequality. Whereas there is a growing policy interest in digital finance, there exists limited empirical evidence on digital risks (DRI) and digital infrastructure (DIF) impacts on financial inclusion (FI) across various levels. This study aims to explore DRI and DIF impacts on FI across different access levels in Nigeria, from 2000 to 2024. Design/methodology/approach To achieve this study’s main goal, both Simultaneous Quantile Regression (SQR) and Method of Moments Quantile Regression (MMQR) were used to assess the distributional influence of DFI and DRI on FI in Nigeria. In addition, the principal component analysis (i.e. PCA) was adopted to develop (or construct) composite indexes for DIF, DRI and FI. Findings The results of both SQR and MMQR estimations disclose that DIF fosters FI, while DRI dampens FI across all levels. Furthermore, DIF and DRI impacts vary across FI levels. DIF exerts a greater positive influence at the middle (or 50th) quantile, suggesting that improvements in DIF are most effective in moderately inclusive systems. Conversely, DRI shows more pronounced adverse effects at the lower (25th) quantile, indicating that greater DRI hurts financially less developed segments (or units). Research limitations/implications Although it focuses primarily on Nigeria, the study unravels the significance of minimizing DRI and strengthening digital security, including expanding DIF to enhance users’ trust in (and access to) financial services, to promote FI. Originality/value To the best of the authors’ knowledge, this study is the first attempt to assess the distributional influence of both DRI and DIF on FI in Nigeria.
Purpose This paper aims to investigate the asymmetric effects of geopolitical risks (GPRs) on domestic investment in India for the period 1997Q2-2024Q4.Design/methodology/approach Nonlinear autoregressive distributed lag (NARDL) and multiple threshold nonlinear autoregressive distributed lag (MTNARDL) models are employed to uncover the asymmetric and nonlinear effects of GPRs on investment.Findings Preliminary investigation using the linear model reveals that a rise in GPRs has a significant negative long-term impact on investment. Results of the NARDL model show that, in the long-run, positive and negative changes in GPRs asymmetrically affect investment, with negative changes having a more pronounced effect than positive ones. The MTNARDL estimates reveal that the investment responds asymmetrically to GPRs of small, moderate, and large degrees. In the long-run, a moderate increase in GPRs has a more pronounced negative impact on investment than both small and large increases, implying a decreasing, U-shaped relationship between GPRs and investment.Practical implications The findings have significant policy implications and underscore the need for proactive, prompt policy interventions to mitigate uncertainty, even in moderate geopolitical shifts.Originality/value While previous studies have captured the impact of GPRs on investment, this paper addresses the issue of asymmetry and nonlinearity in the effects of GPRs on investment, which has received relatively less attention in existing literature. This study contributed to the emerging literature by examining the asymmetric and nonlinear response of investment to varying magnitudes of GPRs.
Purpose The 2008 financial crisis highlighted the crucial importance of financial stability, pointing to the close connection between the real cycle and the business cycle. Extending the work (Achmakou and Hachimi Alaoui, 2024), this paper aims to analyze the role of monetary policy in preserving financial resilience, focusing on its interaction with the financial cycle. It illustrates how financial frictions and the endogenous risk premium amplify and prolong the effects of exogenous shocks. Design/methodology/approach To attenuate these consequences, this paper considers the adoption of an augmented Taylor rule incorporating a financial stability component. A semi-structural general equilibrium model is developed, combining the estimation of coefficients related to the financial cycle and the calibration of other parameters. Estimation is based on quarterly Moroccan data from 2007q1 to 2019q4, without considering the post-COVID period to avoid biases linked to the health shock. Findings The results reveal that the financial stability objective incorporated in policy rule significantly mitigates the amplification of shocks, improves inflation control. Overall, the study concludes that there is a case for expanding the monetary policy mandate while recognizing its complementarity with macroprudential tools. Originality/value This paper contributes to the literature on financial stability in emerging economies by examining the role of monetary policy in enhancing financial resilience.
Purpose - This study examines how bank capital regulation for highly rated, private-label securitization tranches, and related policy changes may have exposed asset backed securities collateralized debt obligation (ABS-CDO) issuing bank holding companies (BHCs) to costs of restoring solvency in 2008-2009. Design/methodology/approach - The study uses: 1) breakpoint analysis to examine the coincidence between regulatory changes and changes in ABS-CDO issuance from 2001 to 2007, and 2) panel data methods to a) estimate treatment effects of BHCs commenting on the regulation and b) relate ABS-CDO exposures to average estimated debt guarantees, reflecting the cost of restoring solvency. Findings - Breakpoint analysis suggests growing ABS-CDO issuance began with the Recourse Rule. Dynamic treatment effects for large BHCs commenting on the Recourse Rule show estimated debt guarantees for these BHCs increased only from Q3 2008-Q3 2009, peaking at $60bn in Q1 2009, with negligible effects for the control group. From Q1 2008-Q1 2009, among trading assets, only ABS-CDO holdings have a large positive association with estimated debt guarantees. Practical implications - To show some costly, unintended consequences of risk-based capital regulation. Originality/value - The study addresses the lack of detailed BHC ABS-CDO holdings by estimating daily issuance as a proxy for supply to identify when growth began, and by using BHC comment letters to identify how the rule change may have exposed those BHCs to costs of restoring solvency.
Purpose This study aims to investigate the relationship between financial development, institutional quality and economic performance in sub-Saharan Africa (SSA). It further examines how institutional strength conditions the growth effects of financial development, with particular attention to potential non-linear dynamics in the finance-growth nexus.Design/methodology/approach Using a dynamic panel framework, the analysis uses data for 46 SSA countries over the period 2010-2023 and applies the two-step system generalised method of moments (system-GMM) estimator to address endogeneity, unobserved heterogeneity and persistence in economic performance. The study estimates the direct effects of financial development and institutional quality, as well as their interaction, while controlling for key structural factors.Findings The results show that financial development has a positive and statistically significant effect on economic performance in SSA, particularly when supported by stronger institutional quality. The interaction between financial development and institutions indicates that institutional strength amplifies the growth-enhancing role of finance. However, no empirical evidence of non-linear effects is found, suggesting that most SSA economies remain below the level at which financial deepening could generate diminishing returns. Robustness checks, including the exclusion of financially advanced SSA countries, confirm the stability of the core findings.Originality/value This study contributes to the finance-growth literature by jointly examining financial development, institutional quality and non-linear dynamics within a unified empirical framework for SSA. It provides recent regional evidence demonstrating that institutional quality acts as a critical transmission channel through which financial development influences growth, while also showing that concerns about excessive financial deepening may be less relevant for developing African economies. The findings offer policy-relevant insights emphasising the need for coordinated financial and institutional reforms to achieve sustained economic growth.
PurposeThis study aims to investigate the effect of digitalization on intermediation inefficiency in Indonesian rural banks.Design/methodology/approachUsing a stochastic frontier analysis (cost function type), the authors estimate a linear model where net interest margin serves as the outcome variable. The variables of interest include the regional digitalization index (RDI) and its interactions with bank size and return on equity (ROE). Control variables include non-performing loans, cost-to-income ratio, liquidity ratio, equity-to-total-assets ratio, ROE and bank size. The model is applied to an annual panel data set of 1,577 rural banks from 2017 to 2023.FindingsThe authors find that the RDI significantly reduces inefficiency, underscoring the role of digitalization in enhancing intermediation performance in rural banking markets. RDI and its interactions explain approximately 38.3%-43.5% of the variation in inefficiency. Cooperative rural banks exhibit the highest inefficiency (33%), while banks located in rural areas show the lowest mean inefficiency at 0.56%. The results remain robust across various specification checks.Originality/valueThis study seeks to answer how digitalization (a key current emerging issue), as measured by the RDI, influences intermediation inefficiency in Indonesian rural banks. The significance of this question lies in its potential to demonstrate how digital tools can address the persistent inefficiencies that have long characterized rural banking.
PurposeThis study aims to investigate the Russian Central Bank's reaction function during the country's transition to inflation targeting, a period marked by severe external shocks, including sanctions and volatile oil prices and domestic economic shifts. The objective is to understand how these challenges shaped the Central Bank's monetary policy strategy.Design/methodology/approachThis study uses Taylor's rule framework to estimate the reaction function, using a dual econometric approach for quarterly data from 2013 to 2024. First, the study applies the logistic smooth transition regression to capture the non-linear dynamics of the key rate over different regimes. Second, it uses the Markov-switching regression to identify shifts in policy inertia by distinguishing between stable and aggressive policy responses.FindingsThe empirical estimates reveal the presence of non-linear behaviour of monetary policy with strong persistence in the policy rate. Also, the non-linear state is characterized by a rapid reversal. The inflation gap exhibits a significant impact across regimes, with coefficients of 0.414 in one regime and 2.46 in another. The Gross Domestic Product (GDP) gap, on the other hand, is observed to be statistically insignificant. In addition, the augmented model that includes the exchange rate confirms similar regime dependencies. However, the Markov-switching estimates reveal a persistent policy inertia during stable periods and more aggressive policy adjustments when faced with extreme conditions.Originality/valueThe study complements the existing monetary policy reaction by providing additional empirical insights into transitional monetary policymaking. It demonstrates how gradual adjustments, and abrupt shifts coalesce to counter macroeconomic uncertainty.
PurposeIn market-led economies, the provision of domestic credit can be critical in driving new business formation. The purpose of this study is to examine whether domestic credit to the private sector is critical to new business formation.Design/methodology/approachBy controlling several hypothesised candidate variables, the panel estimation procedure incorporating data for 85 countries worldwide is applied, where nations are disaggregated into high- and middle-income categories.FindingsThe findings reveal that the provision of domestic credit to the private sector is statistically significantly correlated with new business density. The findings further indicate that equally important are improved regulatory quality, economic growth and the degree of urbanisation as these factors are found to be statistically significant and positive correlates of new business density.Research limitations/implicationsThe main policy implication is that nations that improve their entrepreneurial activities and diversify their private sectors through new business formation should maintain a competitive financial sector with better, easier access to financial credit as part of new business formation policies. It is also essential for governments to minimise borrowing from domestic financial institutions to avoid crowding out of the private production and to create ample space for accessing domestic financial credit by new entrepreneurs.Originality/valueThis study makes a new contribution through assessing the impact of domestic financial credit on new business formation, where entrepreneurial activities contribute to the expansion of private production by controlling several specific factors, some of which are overlooked in previous studies, but expected to impact new business density, hence, further advancing the business economics and entrepreneurship perspective on new business formation.
Purpose This study aims to extend the dynamic conditional correlation (DCC), wavelet coherence (WTC) and Diebold-Yilmaz (DY) spillover index methodologies to investigate the relationship between SJC gold prices, XAU and West Texas intermediate (WTI) crude oil prices. Design/methodology/approach The DCC, WTC and DY spillover index methodologies are used in this study. Findings The results reveal significant dynamic and time-varying relationships among SJC gold, XAU and WTI oil prices. Stronger co-movements and volatility spillovers are observed during the COVID-19 period, indicating heightened market interdependence under uncertainty. The findings also show asymmetric lead-lag effects, with global gold and oil markets playing a dominant role in transmitting shocks to the Vietnamese gold market. In the post-COVID period, the level of connectedness declines but remains significant, suggesting persistent integration. These results highlight the importance of monitoring cross-market linkages for effective risk management. Originality/value The results not only provide insights into financial dynamics but also contribute to the development of risk management strategies and appropriate economic policies, particularly for the Vietnamese gold market in the context of increasingly deep international integration.
Purpose This study aims to investigate how renewable energy adoption, digital transformation, financial inclusion and institutional quality contribute to economic growth in six Australian territories: New South Wales, Queensland, South Australia, Tasmania, Victoria and Western Australia. It seeks to clarify whether these factors, individually and collectively, foster sustainable economic development and advance progress toward key Sustainable Development Goals (SDGs). Design/methodology/approach Using annual data from 1990 to 2024, the analysis applies advanced econometric techniques, including the common correlated effects mean group, mean group and augmented mean group estimators. These methods allow for heterogeneity across regions while capturing the long-run relationships among renewable energy, digitalization, financial inclusion, institutional quality and economic growth. Findings Results demonstrate that renewable energy adoption has a significant positive effect on economic growth, with estimated contributions ranging between 0.246% and 1.240%. Digitalization and financial inclusion further enhance growth, contributing increases of 1.227%–2.231% and 1.025%–1.033%, respectively. The combined effects of renewable energy and digitalization improve infrastructure efficiency, reduce production costs and strengthen regional competitiveness. Financial inclusion broadens participation in the economy, ensuring more equitable growth. Institutional quality amplifies these outcomes, reinforcing long-term sustainability and resilience. Practical implications The findings suggest that policymakers should prioritize policies that expand renewable energy deployment alongside digital infrastructure and inclusive financial systems. Strengthening institutional frameworks will be crucial for maximizing the benefits of these factors, enabling Australia’s territories to achieve multiple SDGs simultaneously, particularly SDG 7 (Affordable and Clean Energy), SDG 8 (Decent Work and Economic Growth), SDG 10 (Reduced Inequalities) and SDG 11 (Sustainable Cities and Communities). Originality/value This research provides one of the first integrated assessments of how renewable energy, digitalization, financial inclusion and institutional quality jointly shape economic development within the Australian context. By offering region-specific evidence, it contributes to the broader debate on sustainable growth strategies and provides actionable insights for policymakers in both developed and developing economies.
PurposeAs artificial intelligence (AI) is taking over our world, this study aim to examine the relationship between AI readiness and financial inclusion in low and lower middle- income countries.Design/methodology/approachIn this study, a balanced panel data for 71 countries over the period from 2019 to 2024 and the generalised method of moments was used.FindingsUsing the generalised method of moments, the results revealed that AI readiness is negatively associated with financial inclusion, suggesting a lower extent of financial inclusion. In addition, this study conducted a robustness check by dividing the countries into low-income and lower-middle-income countries and by using alternative indicators of financial inclusion. Interestingly, robustness checks provide further support for the finding that AI readiness is positively associated with financial inclusion in lower middle-income countries, while the negative impact persists in low-income countries.Research limitations/implicationsThus, this study offers insights for policymakers that strategies for strengthening AI-enabling capacity and promoting inclusive AI-enabled financial services need to be aligned with and appropriate to the country's income level.Originality/valueUnlike much of the existing research, which primarily focuses on high-income or more digitally advanced economies, this study examines the relationship between AI readiness and financial inclusion in low- and lower-middle-income countries. By focusing on these economies, this study provides new insights for scholars and policymakers into how AI readiness may influence financial inclusion as AI technologies become increasingly integrated into financial services, not only in advanced economies but also in developing contexts.
PurposeEconomic Policy Uncertainty (EPU) introduces significant challenges to business decision-making, often dampening investment activity and exerting adverse effects on financial markets. Beyond equities, EPU may also influence alternative asset classes such as gold and cryptocurrencies. This study aims to investigate the impact of EPU on the US stock, gold and Bitcoin markets and these asset classes on each other using monthly time series data from October 2015 to September 2025.Design/methodology/approachFor this study, a vector autoregressive (VAR) framework is initially developed using monthly time series data from October 2015 to September 2025. The time series properties of the data are first examined to assess stationarity, followed by cointegration tests to evaluate the presence of long-run relationships among the variables. As all series are stationary in first differences and the null hypothesis of no cointegration is rejected, a Vector Error Correction Model (VECM) is subsequently used.FindingsThe estimated impulse response functions and variance decomposition results from the VECM reveal that EPU exerts a negative effect on the stock market while positively influencing gold prices, indicating that investors use gold as a hedge against heightened policy uncertainty. In contrast, the effect of EPU on the Bitcoin market is comparatively weaker than that observed in the stock and gold markets.Originality/valueThis study addresses a notable gap in the literature by jointly examining the effects of economic policy uncertainty (EPU) on stock, gold and Bitcoin prices within a unified analytical framework. Using U.S. data, the paper investigates how EPU influences these asset classes during periods of heightened uncertainty and explores the cross-market dynamics through which price movements in one market affect the others. Additionally, the study analyzes the feedback effects of the stock market on EPU, as well as on gold and Bitcoin markets, thereby offering a more comprehensive understanding of the interconnected relationships among traditional and alternative assets under uncertainty.
Purpose This paper aims to examine how different dimensions of Federal Reserve monetary policy communication affect financial market volatility in Türkiye, distinguishing between dovish and hawkish forward guidance and target versus path policy shocks. Design/methodology/approach Using daily data from January 27, 2010 to July 22, 2021, two complementary econometric models are used: an exponential generalized autoregressive conditional heteroskedasticity (EGARCH) model to capture asymmetric volatility responses in individual Turkish asset returns and a dynamic conditional correlation-generalized autoregressive conditional heteroskedasticity (DCC-GARCH) model to examine time-varying correlations between communication surprises and exchange rates, government bond yields and stock returns. Findings Fed communication has significant and heterogeneous effects on Turkish financial markets. Forward guidance, particularly hawkish signals, generates stronger volatility responses than target or path shocks, with the magnitude and direction of effects varying across asset classes. Research limitations/implications Policymakers in emerging economies should carefully monitor both the content and tone of Fed communication, as different policy signals transmit through multiple channels and produce asymmetric effects across financial markets. Originality/value This study contributes to the literature by simultaneously capturing asymmetric volatility responses and time-varying correlations using complementary EGARCH and DCC-GARCH frameworks, offering novel evidence on how the tone and type of Fed communication differentially affect an emerging market economy.
PurposeThis study aims to examine the relationship between digital financial inclusion and financial resilience in three East African countries Kenya, Tanzania and Uganda with the aim of understanding how access to digital financial services shapes the ability of households and individuals to withstand and recover from financial shocks.Design/methodology/approachThe study draws on InterMedia's 2017 financial inclusion data for Kenya, Tanzania and Uganda, with the 2017 Global Financial Inclusion (Global Findex) database used to test the consistency of findings. To address the problem of endogeneity, the study uses two-stage least squares (2SLS) estimation. The robustness of results is further verified using propensity score matching, Lewbel 2SLS technique and Instrumental Variable Probit.FindingsThe results consistently show that digital financial inclusion has a significant positive effect on financial resilience across all three countries. The effect is found to be strongest in Uganda, followed by Tanzania and Kenya. Digital financial inclusion is also shown to be particularly beneficial for rural residents and women. Furthermore, the study identifies increased savings behavior and a greater propensity for entrepreneurship as the key pathways through which digital financial inclusion enhances financial resilience.Originality/valueThis study contributes to the growing literature on digital finance and household economic resilience in sub-Saharan Africa by providing rigorous cross-country empirical evidence from East Africa using multiple estimation strategies to ensure robustness. The findings generate actionable policy recommendations, including the expansion of digital financial infrastructure, the strengthening of financial literacy programs and the design and implementation of gender-inclusive financial policies that specifically target women and rural communities.
Purpose This study aims to examine the effects of digital payments and credit on financial inclusion in Asian countries. Design/methodology/approach The hypotheses are tested using the benchmark regression, a multidimensional fixed effects model for robustness testing and the IV method to address endogeneity problems in panel data from 2014 to 2021. Findings The findings demonstrate that Fintech has a positive impact on financial inclusion by enhancing cost efficiency and saving time for users. Furthermore, the study highlights that financial inclusion is further supported by the interaction between digital lending and Internet usage, as well as the combined effects of mobile money usage and education levels. Originality/value This study expands existing research by examining the role of Fintech in promoting financial inclusion through two aspects – mobile money and digital credit – addressing gaps in previous studies that focused solely on mobile money. It also provides new insights by incorporating interaction variables related to digital literacy and Fintech usage.
