Dynamic common correlated effects of financial inclusion on economic growth: empirical evidence from Organization of Islamic Cooperation (OIC) countries
Purpose: Financial inclusion is a critical component of financial development, which disseminates accessible financial services to benefit all parts of society and consequently promotes economic growth. The study explores the dynamic common correlated effects of financial inclusion on economic growt...
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2024
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2-s2.0-85147996364 Chaudhry I.S.; Yusop Z.; Habibullah M.S. Dynamic common correlated effects of financial inclusion on economic growth: empirical evidence from Organization of Islamic Cooperation (OIC) countries 2024 International Journal of Emerging Markets 19 10 10.1108/IJOEM-11-2021-1751 https://www.scopus.com/inward/record.uri?eid=2-s2.0-85147996364&doi=10.1108%2fIJOEM-11-2021-1751&partnerID=40&md5=d1ac0ae30ffffefa8506a783e5fc436b Purpose: Financial inclusion is a critical component of financial development, which disseminates accessible financial services to benefit all parts of society and consequently promotes economic growth. The study explores the dynamic common correlated effects of financial inclusion on economic growth in Organization of Islamic Cooperation (OIC) countries. Design/methodology/approach: The conventional econometric techniques overlook heterogeneity and cross-sectional dependence and provide false results. Hence, a unique methodology, ‘Dynamic Common Correlated Effects (DCCE)’, is used, which can efficiently tackle the above-mentioned issues. Findings: The DCCE estimation indicates a positive and significant impact of financial inclusion on economic growth in overall and higher-income OIC economies. Moreover, in the lower-income OIC group, financial inclusion is inversely correlated with economic growth, which converts into a positive linkage by including an interaction term of financial inclusion and institutional quality. Practical implications: Based on the research outcomes, it is recommended that policymakers and governments of OIC economies seek to increase financial inclusion to achieve sustainable, optimal and inclusive economic growth. Originality/value: The DCCE technique in this study considers heterogeneity and cross-sectional dependence among countries and thus provides robust findings. © 2022, Emerald Publishing Limited. Emerald Publishing 17468809 English Article |
author |
Chaudhry I.S.; Yusop Z.; Habibullah M.S. |
spellingShingle |
Chaudhry I.S.; Yusop Z.; Habibullah M.S. Dynamic common correlated effects of financial inclusion on economic growth: empirical evidence from Organization of Islamic Cooperation (OIC) countries |
author_facet |
Chaudhry I.S.; Yusop Z.; Habibullah M.S. |
author_sort |
Chaudhry I.S.; Yusop Z.; Habibullah M.S. |
title |
Dynamic common correlated effects of financial inclusion on economic growth: empirical evidence from Organization of Islamic Cooperation (OIC) countries |
title_short |
Dynamic common correlated effects of financial inclusion on economic growth: empirical evidence from Organization of Islamic Cooperation (OIC) countries |
title_full |
Dynamic common correlated effects of financial inclusion on economic growth: empirical evidence from Organization of Islamic Cooperation (OIC) countries |
title_fullStr |
Dynamic common correlated effects of financial inclusion on economic growth: empirical evidence from Organization of Islamic Cooperation (OIC) countries |
title_full_unstemmed |
Dynamic common correlated effects of financial inclusion on economic growth: empirical evidence from Organization of Islamic Cooperation (OIC) countries |
title_sort |
Dynamic common correlated effects of financial inclusion on economic growth: empirical evidence from Organization of Islamic Cooperation (OIC) countries |
publishDate |
2024 |
container_title |
International Journal of Emerging Markets |
container_volume |
19 |
container_issue |
10 |
doi_str_mv |
10.1108/IJOEM-11-2021-1751 |
url |
https://www.scopus.com/inward/record.uri?eid=2-s2.0-85147996364&doi=10.1108%2fIJOEM-11-2021-1751&partnerID=40&md5=d1ac0ae30ffffefa8506a783e5fc436b |
description |
Purpose: Financial inclusion is a critical component of financial development, which disseminates accessible financial services to benefit all parts of society and consequently promotes economic growth. The study explores the dynamic common correlated effects of financial inclusion on economic growth in Organization of Islamic Cooperation (OIC) countries. Design/methodology/approach: The conventional econometric techniques overlook heterogeneity and cross-sectional dependence and provide false results. Hence, a unique methodology, ‘Dynamic Common Correlated Effects (DCCE)’, is used, which can efficiently tackle the above-mentioned issues. Findings: The DCCE estimation indicates a positive and significant impact of financial inclusion on economic growth in overall and higher-income OIC economies. Moreover, in the lower-income OIC group, financial inclusion is inversely correlated with economic growth, which converts into a positive linkage by including an interaction term of financial inclusion and institutional quality. Practical implications: Based on the research outcomes, it is recommended that policymakers and governments of OIC economies seek to increase financial inclusion to achieve sustainable, optimal and inclusive economic growth. Originality/value: The DCCE technique in this study considers heterogeneity and cross-sectional dependence among countries and thus provides robust findings. © 2022, Emerald Publishing Limited. |
publisher |
Emerald Publishing |
issn |
17468809 |
language |
English |
format |
Article |
accesstype |
|
record_format |
scopus |
collection |
Scopus |
_version_ |
1818940551316111360 |