Financial Inclusion and Economic Growth in West Africa: The Moderating Effect of Financial Openness

Yakubu, Ibrahim Nandom and Bunyaminu, Alhassan (2021): Financial Inclusion and Economic Growth in West Africa: The Moderating Effect of Financial Openness. Published in: Empirical Economics Letters , Vol. 20, No. 2 (1 February 2021): pp. 155-164.

Abstract

This paper examines the impact of financial inclusion on economic growth in the Economic Community of West African States (ECOWAS) countries. The study also investigates how financial inclusion through financial openness enhances growth. Applying the pooled estimated generalized least squares (EGLS) technique with data from 10 countries in ECOWAS over the period 2010-2017, the results reveal that financial inclusion exerts a positive significant influence on economic growth through its direct effect and via financial openness. The findings also show that while inflation reduces growth, trade openness and foreign direct investment significantly stimulate economic growth in ECOWAS. The study emphasizes the need for greater efforts to address the challenges involved in accessing financial services as one of the most effective ways of realizing inclusive growth.

• Item Type: MPRA Paper
• Language: English
• Keywords: financial inclusion; economic growth; pooled EGLS; ECOWAS
• Subjects: G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O43 - Institutions and Growth

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