Financial inclusion and legal system quality: are they correlated?

Ozili, Peterson Kitakogelu (2021): Financial inclusion and legal system quality: are they correlated? Forthcoming in: Journal of Money and Business

Abstract

This study investigates the correlation between financial inclusion and legal system quality among developed countries from 2004 to 2012. The findings reveal a positive correlation between financial inclusion and legal system quality. The findings suggest that improvements in legal system quality goes hand in hand with improvements in the level of financial inclusion. More specifically, higher supply of ATM per 100,000 adults is correlated with stronger insolvency resolution framework among G7, European and non-European countries. Also, the number of bank branch per 100,000 adults is positively correlated with strong rule of law and legal rights in non-European countries. Also, the number of ATMs per 100,000 adults is positively correlated with strength of insolvency resolution framework and negatively correlated with the time it takes to resolve insolvency before, during and after the global financial crisis.

• Item Type: MPRA Paper
• Language: English
• Keywords: Law, development, financial inclusion, ATM, bank branch, legal rights, legal system, rule of law, insolvency resolution.
• Subjects: G - Financial Economics > G2 - Financial Institutions and Services > G20 - General; G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages; G - Financial Economics > G2 - Financial Institutions and Services > G28 - Government Policy and Regulation; K - Law and Economics > K0 - General > K00 - General; K - Law and Economics > K1 - Basic Areas of Law > K12 - Contract Law; K - Law and Economics > K2 - Regulation and Business Law > K23 - Regulated Industries and Administrative Law; K - Law and Economics > K4 - Legal Procedure, the Legal System, and Illegal Behavior > K40 - General; K - Law and Economics > K4 - Legal Procedure, the Legal System, and Illegal Behavior > K42 - Illegal Behavior and the Enforcement of Law; K - Law and Economics > K4 - Legal Procedure, the Legal System, and Illegal Behavior > K49 - Other

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