Financial Inclusion: A New Multi-dimensional Index And Determinants – Evidence From The Union For The Mediterranean Countries

randall — Wed, 08 Jul 2020 23:50:23 +0000

This paper proposes a new multi-dimensional financial inclusion index based on a two-stage Principal Components Analysis (PCA) and aggregating indicators of availability, access and use. The paper first assesses the cross-country variations in the index and analyses trends over time for a sample of countries members of the Union for the Mediterranean (UfM) from 2010-18. Second, it investigates factors that could explain the level of financial inclusion across countries.

Our financial inclusion index shows a downward trend for the full sample over the period under investigation, however when splitting the sample by income group, it appears that high and middle income countries did not register the same trend. When examining the determinants of financial inclusion for UfM countries, we find that macroeconomic, social and governance factors, as well as banking conditions, matter.

The post Financial Inclusion: A New Multi-dimensional Index And Determinants – Evidence From The Union For The Mediterranean Countries appeared first on EMGN.

Financial Development and Employment: New Evidence

randall — Mon, 20 May 2019 23:22:30 +0000

This paper adds to the existing literature on finance and growth, by exploring the effect of finance on the labour market, using data on 143 countries from 1995 to 2015. We also examine whether the impact of financial development on labour is significantly different prior to and after the 2008 global financial crisis. This paper has five main findings: first, the analysis confirms the positive relationship between the efficiency of and access to financial institutions and the employment rate in the linear specification; second, the marginal returns to employment from further financial institution inclusion diminish at high levels of inclusion and turn negative when a certain threshold is reached; third, the effects of financial market access on employment create a U-shaped relationship, where financial market access begins impacting on employment when a threshold of access is reached; fourth, the positive effect of financial development on employment strengthens with the country’s institutional quality; finally, there is strong support for financial development having a negative impact on employment during the 2008 global financial crisis.

The post Financial Development and Employment: New Evidence appeared first on EMGN.

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Financial Inclusion: A New Multi-dimensional Index And Determinants – Evidence From The Union For The Mediterranean Countries

Financial Development and Employment: New Evidence