|
on Financial Development and Growth |
| By: | Malherbe, Frédéric; McMahon, Michael |
| Abstract: | Government guarantees to banks are ubiquitous. We study an equilibrium model where, in the presence of such guarantees, the equilibrium allocation can be characterised as Panglossian: it corresponds to that of a deterministic economy where the best possible state always occurs. However, GDP is inefficiently high and expected consumption inefficiently low. Financial sophistication magnifies this distortion, taking the allocation beyond the Panglossian outcome (i.e. with even higher GDP and even lower expected consumption). We argue that this mechanism is empirically relevant for advanced economies and suggest that the Great Recession, partly, reversed a Great Distortion. |
| JEL: | E22 G28 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15180&r= |
| By: | Acharya, Viral V.; Jager, Maximilian; Steffen, Sascha; Steinruecke, Lea |
| Abstract: | We analyze the determinants and the long-run consequences of government interventions in the eurozone banking sector during the 2008/09 financial crisis. Using a novel and comprehensive dataset, we document that fiscally constrained governments "kicked the can down the road" by providing banks with guarantees instead of full-fledged recapitalizations. We adopt an econometric approach that addresses the endogeneity associated with governmental bailout decisions in identifying their consequences. We find that forbearance caused undercapitalized banks to shift their assets from loans to risky sovereign debt and engage in zombie lending, resulting in weaker credit supply, elevated risk in the banking sector, and, eventually, greater reliance on liquidity support from the European Central Bank. |
| Keywords: | Bank Recapitalization; evergreening; fiscal constraints; Forbearance; political economy; sovereign debt crisis; zombie lending |
| JEL: | E44 G21 G28 G32 G34 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15009&r= |
| By: | Plantin, Guillaume |
| Abstract: | During a financial crisis, a central bank temporarily subsidizes the interest rate so as to maintain borrowing at normal levels. Savers may search for yield and blow rational stochastic bubbles that generate a higher expected return than the policy rate before bursting at the end of monetary easing. Unlike standard rational bubbles, that are not monetary phenomena, these bubbles are "bad" in the sense that they crowd out investments that would otherwise generate a higher expected return than that on the bubbles. |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15197&r= |
| By: | Ofori, Isaac Kwesi; Asongu, Simplice A. |
| Abstract: | This study examines the joint effects of ICT diffusion (composed of access, usage and skills), and foreign direct investment (FDI) on inclusive growth in sub-Saharan Africa (SSA). The study draws on data from the World Bank’s World Development Indicators, and the Global Consumption and Income Project for the period 1980–2019 for the analysis. The study provides evidence robust to several specifications from ordinary least squares and dynamic system GMM estimation techniques to show that: (1) FDI and ICT diffusion and corresponding components (ICT access, usage, skills) induce inclusive growth in SSA; (2) compared to its direct effect, FDI is remarkable in fostering shared growth in SSA in the presence of greater ICT diffusion, and (3) compared to ICT access and usage, ICT skills are more effective in driving inclusive growth in SSA. Overall FDI modulates ICT dynamics to engender positive synergy effects on inclusive growth. Policy recommendations are provided in line with the implementation of the African Continental Free Trade Area (AfCFTA) Agreement and the projected rise in FDI in SSA from 2022. |
| Keywords: | FDI; ICT Access; ICT Diffusion; ICT Skills; ICT Usage; Inclusive Growth; sub-Saharan Africa |
| JEL: | E23 F21 F30 L96 O55 |
| Date: | 2021–05–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107757&r= |
| By: | Woodgate, Ryan |
| Abstract: | In recent decades, governments around the world have increasingly used various forms of state aid to try to attract and retain the business activity of foreign-owned multinational corporations. Yet, in most cases, this "commercialisation of state sovereignty" (Palan, 2002) has failed to catalyse foreign investment and economic growth as intended. This paper seeks to understand the general failure of such commercialised state strategies, while also explaining how demand and income growth in some notable exceptions can be understood. To this end, a simple demand-led model is presented that suggests that foreign-targeted state aid may lead to beggarthy-neighbour, FDI-driven growth in one economy if certain conditions are met, such as there being sufficiently little policy competition from other countries. It is shown that the exceptional cases tend to be the early movers, i.e. those few economies and special economic zones that engaged in the commercialisation of state sovereignty before the widespread competitive emulation that followed. This paper argues that state aid for the attraction of foreign multinationals is unlikely to be an effective growth strategy in the current environment of intense state competition and that international coordination on corporation tax and other forms of state aid is desirable. |
| Keywords: | policy competition,foreign direct investment,tax havens,export platforms |
| JEL: | E12 F23 F62 H26 H71 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ipewps:1612021&r= |
| By: | Jean-Marc Gravellini (FERDI - Fondation pour les Etudes et Recherches sur le Développement International); Florian Léon (FERDI - Fondation pour les Etudes et Recherches sur le Développement International) |
| Abstract: | The private sector plays a crucial role in promoting the sustainable development. It is generally accepted that firms creates wealth, generates jobs and thus contributes to improving the living conditions of populations; while being able to increasingly ensure the preservation of natural resources, biodiversity and the climate and promoting the emancipation of women. |
| Keywords: | Africa,Entrepreneurship |
| Date: | 2021–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03228528&r= |
| By: | Ekor, Maxwell; Orekoya, Tayo; Musa, Philip; Damisah, Osikwemhe |
| Abstract: | The debt and economic growth debate remain topical in Nigeria given the controversies that often trail the government’s plan to always borrow to fund the annual budget deficits. This study provides an empirical contribution to the national discourse by assessing the impact of foreign debt on the Nigerian economy. Applying a dynamic variant of the auto-regressive distributed lag model, the main result from this study is that in the long run, external debt accumulation and the associated service payments have negative effects on the economy. The policy implication is that government should always ensure that external debt accretion is sustainable and used for infrastructure development. |
| Keywords: | Economic Growth; External Debt; Auto-Regressive Distributed lag Model |
| JEL: | H61 H62 H63 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107844&r= |
| By: | Carlitz, Ruth D.; Ziaja, Sebastian |
| Abstract: | Aid fragmentation is widely denounced, though recent studies suggest potential benefits. To reconcile these mixed findings, we make a case for studying differences across aid sectors and levels of analysis. Our cross-national time-series analysis of data from 141 countries suggests aid fragmentation promotes child survival and improves governance. However, just looking across countries has the potential to blur important within-country differences. We analyse subnational variation in Sierra Leone and Nigeria and find that the presence of more donors is associated with worse health outcomes, but better governance outcomes. This suggests that having more donors within a locality can be beneficial when they are working to improve the systems through which policies are implemented, but harmful when they target policy outcomes directly. A survey of Nigerian civil servants highlights potential mechanisms. Fragmentation in health aid may undermine civil servants' morale, whereas diversity in governance aid can promote meritocratic behaviour. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:diedps:172021&r= |
| By: | Rizos, Anastasios; Kapopoulos, Panayotis |
| Abstract: | The growth-enhancing property of a well-functioned judicial system is documented on the back of the safeguarding of property rights and legal investor protection, the well-functioning of financial markets, the support to entrepreneurship and the upholding of the firm growth. We investigate the effects of judicial efficiency on economic growth, using a new dataset over the period 2010-2018 drawn by the EU Justice Scoreboard study. More specifically, we estimate a static growth equation controlling for alternative judicial efficiency measures. Our findings corroborate that the inefficiencies in the operation of judicial systems pose obstacles to economic growth, and consequently, positive developments in judicial efficiency can be growth enhancing. Specifically, inefficiencies in the operation of judicial systems, measured alternatively as (a) lengthier court proceedings, (b) lower rates of clearance of accumulated unresolved cases, (c) increasing burden of pending cases and (d) a high inflow of new cases, all undermine economic growth. Our results justify the further adoption of judicial reforms in European Union members, that strengthen the enforcement of private contracts, incentivizing the domestic and external investment decisions and supporting the European economies to achieve and sustain robust growth rates. Finally, we find that civil origin legal systems, which are characterized by a higher degree of formalism in judicial procedures relative to common law origin systems, hinder economic growth. |
| Keywords: | judicial efficiency, economic growth, disposition time, clearance rate, caseload |
| JEL: | C23 C26 K40 O43 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107861&r= |
| By: | Lee, Seungcheol; Luetticke, Ralph; Ravn, Morten O |
| Abstract: | We examine the impact of frictional financial intermediation in a HANK model. An incentive problem restricts banking sector leverage and gives rise to an equilibrium spread between the returns on savings and debt. The size of this spread impacts on the wealth distribution and movements in it subject borrowers and savers to different intertemporal prices. The model generates a financial accelerator that is larger than in a representative agent setting, derives mainly from consumption rather than investment, and works through a countercyclical interest rate spread. Credit policy can mute this mechanism while stricter regulation of banking sector leverage inhibits households' ability to smooth consumption in response to idiosyncratic risk. Thus, although leverage restrictions stabilize at the aggregate level, we find substantial welfare costs. |
| Keywords: | business cycles; Financial Frictions; incomplete markets; macroprudential policy; monetary policy |
| JEL: | C11 D31 E32 E63 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15133&r= |
| By: | Maryam Farboodi; Péter Kondor |
| Abstract: | We investigate the heterogeneous boom and bust patterns across countries that emerge as a result of global shocks. Our analysis sheds light on the emergence of core and periphery countries, and the joint determination of the depth of recessions and tightness of credit markets across countries. The model implies that interest rates are similar across core and periphery countries in booms, with larger credit and output growth in periphery countries. However, a common global shock that leads to a credit crunch across the globe gives rise to a sharper spike in interest rates and a deeper recession in periphery countries, while a credit flight to the core alleviates the adverse consequences in these countries. We explore the implication of the model about credit spreads, portfolio rebalancing, investment, non-performing debt and concentration of debt ownership during booms and busts, both in the time series and in the cross-section, and connect them to existing stylized facts. We further demonstrate how the anatomy of the global economy evolves as a result of aggregate demand and supply shocks to financing, such as a global saving glut. |
| JEL: | F4 F44 G15 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28834&r= |
| By: | Ozge Akinci; Albert Queraltó |
| Abstract: | The question of how U.S. monetary policy affects foreign economies has received renewed interest in recent years. The bulk of the empirical evidence points to sizable effects, especially on emerging market economies (EMEs). A key theme in the literature is that these spillovers operate largely through financial channels—that is, the effects of a U.S. policy tightening manifest themselves abroad via declines in international risky asset prices, tighter financial conditions, and capital outflows. This so-called Global Financial Cycle has been shown to affect EMEs more forcefully than advanced economies. It is because higher U.S. policy rates have a disproportionately larger impact on rates in EMEs. In our recent research, we develop a model with cross-border financial linkages that provides theoretical foundations for these empirical findings. In this Liberty Street Economics post, we use the model to illustrate the spillovers from a tightening of U.S. monetary policy on credit spreads and on the uncovered interest rate parity (UIP) premium in EMEs with dollar-denominated debt. |
| Keywords: | financial frictions; U.S. monetary policy spillovers; currency premium; financial conditions |
| JEL: | E52 F00 |
| Date: | 2021–05–17 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednls:91744&r= |
| By: | Julian di Giovanni; Galina Hale |
| Abstract: | We quantify the role of global production linkages in explaining spillovers of U.S. monetary policy shocks to stock returns across countries and sectors using a newly constructed dataset. Our estimation strategy is based on a standard open-economy production network model that delivers a spillover pattern consistent with a spatial autoregression (SAR) process. We use the SAR model to decompose the overall impact of U.S. monetary policy on global stock returns into a direct and a network effect. We find that nearly 70% of the total impact of U.S. monetary policy shocks on country-sector stock returns are due to the network effect of global production linkages. Our results are robust to changes in the definitions of stock returns and monetary policy shocks, to controlling for correlates of the global financial cycle, foreign monetary policy shocks, and to alternative empirical specifications. |
| JEL: | F10 F36 G15 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28827&r= |
| By: | Fumagalli, Chiara; Motta, Massimo; Tarantino, Emanuele |
| Abstract: | We analyse the optimal policy of an antitrust authority towards the acquisitions of potential competitors in a model with financial constraints and asymmetric information. With respect to traditional mergers, these acquisitions trigger a new trade-off. On the one hand, the acquirer may decide to shelve the project of the potential entrant. On the other hand, the acquisition may allow for the development of a project that would otherwise never reach the market. We first show that a merger policy does not need to be lenient towards acquisitions of potential competitors to take advantage of their pro-competitive effects on project development. This purpose is achieved by a strict merger policy that pushes the incumbent towards the acquisition of potential competitors lacking the financial resources to develop their project independently. An equivalent rule would consist in blocking takeovers whose acquisition price is above a certain threshold. However, we also show that, if the anticipation of a takeover relaxes the target firm's financial constraints, a more lenient merger policy, which allows for the acquisition of firms that have already committed to enter the market, may be optimal. We identify the cumulative conditions necessary for this to be the case. They include the presence of pronounced financial imperfections. Hence, the more developed financial markets, the more likely that a stringent merger policy will be optimal. |
| Keywords: | Conglomerate mergers; Digital Markets; Merger Policy; Potential competition |
| JEL: | K21 L13 L41 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15113&r= |
| By: | Martinez Miera, David; Repullo, Rafael |
| Abstract: | This paper shows the relevance of market power to assess the effects of safe interest rates on financial intermediaries' risk-taking decisions. We consider an economy where (i) intermediaries have market power in granting loans, (ii) intermediaries monitor borrowers which lowers their probability of default, and (iii) monitoring is costly and unobservable which creates a moral hazard problem with uninsured depositors. We show that lower safe rates lead to lower intermediation margins and higher risk-taking when intermediaries have low market power, but the result reverses for high market power. We examine the robustness of this result to introducing non-monitored market finance, heterogeneity in monitoring costs, and entry and exit of intermediaries. We also consider the effect of replacing uninsured by insured deposits, market power in raising deposits, and funding with both deposits and capital. |
| Keywords: | Bank monitoring; bank risk-taking; Imperfect Competition; intermediation margins; monetary policy |
| JEL: | E52 G21 L13 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15063&r= |
| By: | Lapid , Ana Kristel (Asian Development Bank); Mercado, Jr. , Rogelio (Asian Development Bank); Rosenkranz, Peter (Asian Development Bank) |
| Abstract: | Cross-border bank positions in Asia and the Pacific remain highly concentrated to few counterparties, exposing the region to financial risks and policy spillovers. Consequently, assessing the determinants and impacts of the region’s cross-border banking concentration is relevant to the design of appropriate policies for promoting financial development and safeguarding financial stability. To this end, we construct cross-border bank concentration measures for 47 economies in Asia and the Pacific from 2000 to 2019. The results show that higher openness of capital account and trade, as well as better per capita income, are significantly associated with lower cross-border bank concentration. Moreover, elevated cross-border bank concentration tends to lower domestic credit growth and nonperforming loans. We find no impact on bank profitability for the region. |
| Keywords: | Asia and the Pacific; bank profitability; credit growth; cross-border bank concentration; cross-border bank exposures; nonperforming loans |
| JEL: | E44 F36 G21 O16 |
| Date: | 2021–05–06 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbewp:0636&r= |
| By: | de Haas, Ralph; Lu, Liping; Ongena, Steven |
| Abstract: | We interview 379 European bank CEOs to identify their banks' main competitors. We then provide evidence on the drivers of bilateral bank competition, construct a novel competition measure at the locality level, and assess how well it explains variation in firms' credit constraints. We find that banks identify another bank as a main competitor in small-business lending when their branch networks overlap, when both are foreign owned or relationship oriented, or when the potential competitor has fewer hierarchical layers. Intense bilateral bank competition increases local credit constraints, especially for small firms, as competition may impede the formation of lending relationships. |
| Keywords: | Bilateral bank competition; credit constraints; multimarket contact |
| JEL: | D22 D40 F36 G21 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15015&r= |
| By: | Buss, Adrian; Uppal, Raman; Vilkov, Grigory |
| Abstract: | We develop a dynamic general-equilibrium framework with multiple households and multiple risky assets to explain how less- and more-sophisticated households differ in their portfolio and wealth dynamics. Differences in sophistication are modeled via heterogeneous confidence about asset returns, coupled with Bayesian learning. Consistent with recent empirical evidence, less-sophisticated households overinvest in safe assets, hold underdiversified portfolios concentrated in familiar assets, are trend chasers, and earn lower absolute and risk-adjusted investment returns. Notably, this behavior is a consequence of optimal choices rather than investment mistakes. The model explains why this behavior, despite learning, persists for long periods, thereby exacerbating wealth inequality. |
| Keywords: | Belief formation; household finance; investors' expectations; trend chasing; Wealth Inequality |
| JEL: | D53 G11 G51 G53 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15116&r= |
| By: | PINSHI, Christian P. |
| Abstract: | This article explores the potential opportunity of FinTech on the financial system in the dark and wicked era of COVID-19. We first provide a seven-figure overview of the unpleasant impact of COVID-19 on the financial system. FinTech sees itself on the one hand as a hope to rebalance the global financial system in this time of financial turmoil, and on the other hand becomes an ultimate weapon to strengthen the resilience of the financial system and respond to the crisis by ensuring the functioning system while respecting containment measures and preventing the spread of the virus. |
| Keywords: | FinTech, Financial system, COVID-19 |
| JEL: | E2 E44 G2 O33 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107863&r= |
| By: | Sanu, Md Sahnewaz |
| Abstract: | The objective of this study is to evaluate the effect of GDP growth, coal consumption, financial advancement, and trade openness on CO2 discharges in India for the time span 1971-2017. The present research employs the ARDL bounds test to inspect the long-run cointegrating linkage followed by Granger causality test structured on vector error correction modelling (VECM) techniques to analyse the causal relationship between the variables. The results obtained from the bounds F-statistics confirm the presence of a long-run stable relationship between the variables. The results further demonstrate that GDP growth and coal consumption raise carbon emissions substantially while the financial development and trade openness boost the environmental quality in India. Besides, the findings confirm an inverse quadratic link between economic growth and CO2 discharges, supporting the validity of EKC hypothesis for India. The Granger causality analysis shows bidirectional causality between coal consumption and economic growth, economic growth and CO2 emissions and between coal consumption and CO2 emissions. |
| Keywords: | CO2 emissions, GDP, coal consumption, financial development; trade openness; Environmental Kuznets curve; ARDL; VECM; India. |
| JEL: | C32 Q43 Q53 Q56 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107845&r= |
| By: | Pradhan, Jaya Prakash; Husain, Tareef |
| Abstract: | The development of small and medium enterprises (SMEs) sector is a key policy priority as these enterprises play a critical role in the growth and development process of any economy. The present study is motivated to explore the regional dimensions of entry of new SMEs across Indian states and sectors covering an extensive study period 1980─2007. It further expands the literature on formation of firms from the sub-national perspective, empirically uncovering regional factors that significantly determine the formation of new firms. Findings suggest that new SME formation in India is characterized by a concentrated regional pattern during the study period with a few regions accounting for disproportionate share of the number of new SMEs formed. Also, Indian sub-national entities exhibited considerably disparity in the entry rate of new SMEs. Regional factors like local market size, availability of skills, technological specialization of manufacturing sector, land transportation networks, and entrepreneurial culture tend to play positive role in the formation rate of SMEs in Indian states. |
| Keywords: | SMEs, India, Regions, Entry Rate |
| JEL: | L11 L26 R11 |
| Date: | 2021–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:25061&r= |
| By: | Levine, Ross; Rubinstein, Yona |
| Abstract: | We study the effects of ability and liquidity constraints on entrepreneurship. We develop a three sector Roy model that differentiates between entrepreneurs and other self-employed to address puzzling gaps that have emerged between theory and evidence on entry into entrepreneurship. The model predicts-and the data confirm-that entrepreneurs are positively selected on highly-remunerated cognitive and non-cognitive human capital skills, but other self-employed are negatively selected on those same abilities; entrepreneurs are positively selected on collateral, but other self-employed are not; and entrepreneurship is procyclical, but self-employment is countercyclical. |
| Keywords: | business cycles; Corporate Finance; entrepreneurship; Human Capital; Occupational choice |
| JEL: | E32 G32 J24 L26 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15143&r= |
| By: | Vargas, Jerrick Jan |
| Abstract: | Obtaining loans from Philippine banks is difficult and government support to credit was inadequate. The overall rural sector in the Philippines needs better access to credit since it could enhance their livelihood by means of expanding their agricultural activities. Farmers must also be encouraged to use high yielding inputs such as seeds, farm mechanization equipment and other harvesting and planting equipment in order to improve the quality and quantity of output. This could improve the loan repayment rates on the part of the farmers. More competition and not government subsidies to individuals or institutions is the key on having an efficient, sustainable and forward-looking rural finance sector. |
| Keywords: | Rural Finance |
| JEL: | Q14 |
| Date: | 2021–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107509&r= |
| By: | Kazembe, Cynthia |
| Abstract: | This paper reviews different studies on technology adoption in sub-Saharan Africa to understand the determinants of low adoption of improved technologies, with a special focus on Malawi. This will in turn help explain why there is a gap between awareness and adoption of agriculture technologies. As evidenced from the results of the FGDs conducted in Malawi in 2018, despite the visible benefits of the new technologies, farmers often do not adopt or take a long time to adopt them. This creates a gap between awareness of agriculture technologies and their adoption. The existing literature from sub-Saharan Saharan Africa, demonstrates that adoption, as a decision-making process, is affected by farmers’ access to information, their financial and human capital, incentives and external programs, plus farmers’ attitude to risk. |
| Keywords: | MALAWI; SOUTHERN AFRICA; AFRICA SOUTH OF SAHARA; AFRICA; technology; agriculture; access to information; agricultural extension; human capital; adoption; incentives; risk; fertilizers; agricultural technologies; financial capital; DeSIRA; Developing Smart Innovations through Research in Agriculture (DeSIRA); technology awareness; agriculture technology adoption |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:prnote:1243326122&r= |
| By: | Manohar Serrao; Aloysius Sequeira; K. V. M. Varambally |
| Abstract: | Financial inclusion and inclusive growth are the buzzwords today. Inclusive growth empowers people belonging to vulnerable sections. This in turn depends upon a variety of factors, the most important being financial inclusion, which plays a strategic role in promoting inclusive growth and helps in reducing poverty by providing regular and reliable sources of finance to the vulnerable sections. In this direction, the Government of India in its drive for financial inclusion has taken several measures to increase the access to and availing of formal financial services by unbanked households. The purpose of this paper is to assess the nature and extent of financial inclusion and its impact on the socio-economic status of households belonging to vulnerable sections focusing on inclusive growth. This has been analyzed with the theoretical background on financial access and economic growth, and by analyzing the primary data collected from the Revenue Divisions of Karnataka. The results show that there is a disparity in nature and extent of financial inclusion. Access to, availing of formal banking services pave the way to positive changes in the socio-economic status of households belonging to vulnerable sections which are correlated, leading to inclusive growth based on which the paper proposes a model to make the financial system more inclusive and pro-poor. |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2105.11716&r= |
| By: | Ozili, Peterson K |
| Abstract: | Achieving high levels of financial inclusion has been a policy priority for policy makers in many countries as policy makers seek to reduce the level of financial exclusion to low levels. There have also been increased interest in financial inclusion research by academics. This paper proposes some index and ratios of financial inclusion and financial exclusion. The proposed index, measures and ratios are easy to compute and are comparable across countries. Policy makers, analysts and academics will find it useful. |
| Keywords: | Financial inclusion, financial exclusion, poverty, access to finance, index, inclusive growth, development |
| JEL: | G00 G21 O17 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107866&r= |
| By: | Lo Prete, Anna (University of Turin) |
| Abstract: | This work studies the long-run association between political participation and different levels and types of education across countries, with a special focus on financial literacy. In a sample of advanced and developing countries observed over the period 1990-2014, financial literacy increases citizens’ participation to political life. The results hold applying linear and instrumental variables techniques, and in panel regressions that characterize the medium-term determinants of voter turnout. The nexus between education at school and voter turnout is not as robust both in the long-term and in the medium-term. One interpretation is that school education is arguably related to the development of civic skills. However, these skills alone might not be as powerful to spur civic engagement, and in turn electoral participation, as those skills needed to gauge the contents of policies and policy agendas that indicators of financial literacy capture. |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:uto:dipeco:202105&r= |