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Foreign Banks and Financial Inclusion in Emerging and Developing Economies: An Empirical Investigation
Author(s) -
Gopalan Sasidaran,
Rajan Ramkishen S.
Publication year - 2018
Publication title -
journal of international development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.533
H-Index - 66
eISSN - 1099-1328
pISSN - 0954-1748
DOI - 10.1002/jid.3354
Subject(s) - financial inclusion , dimension (graph theory) , inclusion (mineral) , emerging markets , financial system , empirical research , empirical evidence , business , economics , developing country , panel data , financial sector , finance , financial services , economic growth , sociology , gender studies , philosophy , mathematics , epistemology , pure mathematics , econometrics
An important dimension of the effects of foreign bank presence on financial sector development relates to that of financial inclusion. Despite its significance, the empirical literature offers little evidence on the relationship between foreign banks and financial inclusion. We examine this relationship by focusing on impact of foreign banks on both the accessibility and usage dimensions of financial inclusion for a panel of 50 emerging and developing economies over 2004–2009. Our findings show that foreign banks have a strong positive impact in furthering financial access while tending to impede the usage dimension, which is robust to alternative methodologies and definitions. Copyright © 2018 John Wiley & Sons, Ltd.