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Does financial literacy improve financial inclusion in developing countries? A nonlinearity and quantile regression analysis


Citation

Md Jamil, Abd Rahim and Law, Siong Hook and Sabri, Mohamad Fazli and Afham, Mohamad Khair (2023) Does financial literacy improve financial inclusion in developing countries? A nonlinearity and quantile regression analysis. Malaysian Journal of Economic Studies, 60 (2). pp. 1-26. ISSN 1511-4554

Abstract

This study investigated the nexus between financial literacy and financial inclusion using the cross-section threshold regression model and the quantile regression technique. The sample covered 73 developing countries categorised as lower-middleincome or upper-middle-income economies. The main results of the threshold model revealed that financial literacy had no inverted U-shaped effect on financial inclusion in the sample of developing countries. This situation indicated that financial literacy had a linear or monotone relationship with financial inclusion. The quantile regression model was used to compare the findings in this investigation. The empirical result indicated that the financial literacy variable had a limited impact on the conditional distribution of financial inclusion. However, the coefficient values were much larger at high than low quantiles. This studys results are necessary for policymakers and financial institutions to implement financial literacy programs targeted at specific behaviours and underserved populations in developing countries.


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Additional Metadata

Item Type: Article
Divisions: Faculty of Human Ecology
School of Business and Economics
DOI Number: https://doi.org/10.22452/mjes.vol60no2.3
Publisher: Malaysian Economic Association
Keywords: Financial literacy; Financial inclusion; Threshold estimation; Quantile regression estimation; Quality education
Depositing User: Ms. Nur Faseha Mohd Kadim
Date Deposited: 04 Nov 2024 03:45
Last Modified: 04 Nov 2024 03:45
Altmetrics: http://www.altmetric.com/details.php?domain=psasir.upm.edu.my&doi=10.22452/mjes.vol60no2.3
URI: http://psasir.upm.edu.my/id/eprint/107389
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