Is financial inclusion good for bank stability International evidence SRO-version.pdf (621.69 kB)
Is financial inclusion good for bank stability? International evidence
journal contribution
posted on 2023-06-09, 07:41 authored by Mostak AhamedMostak Ahamed, Sushanta MallickFinancial inclusion has become an important public policy priority following the recent global financial crisis. Yet, we know very little of how it impacts soundness of the providers of financial services. Using an international sample of 2600 banks in 86 countries over the period 2004–12, we find that higher level of financial inclusion contributes to greater bank stability. The positive association is particularly pronounced with those banks that have higher customer deposit funding share and lower marginal costs of providing banking services; and also with those that operate in countries with stronger institutional quality. The results are robust to instrumental variables analysis, controlling for bank fixed effects, alternative measures of financial inclusion, among several other robustness tests. Our results highlight that the importance of ensuring inclusive financial system is not only a development goal but also an issue that should be prioritised by banks, as such a policy drive is good for their stability.
History
Publication status
- Published
File Version
- Accepted version
Journal
Journal of Economic Behavior & OrganizationISSN
0167-2681Publisher
ElsevierExternal DOI
Volume
157Page range
403-427Department affiliated with
- Accounting and Finance Publications
Full text available
- Yes
Peer reviewed?
- Yes
Legacy Posted Date
2017-09-13First Open Access (FOA) Date
2019-02-01First Compliant Deposit (FCD) Date
2017-09-13Usage metrics
Categories
No categories selectedKeywords
Licence
Exports
RefWorks
BibTeX
Ref. manager
Endnote
DataCite
NLM
DC