Exploring The Nexus Between Financial Inclusion, Poverty, Digitalization And Sustainable Development Goal
Abstract
The significance of sustainability has been increasing and also financial organizations adopted a broad view of their purposes to serve all stakeholders. It is important to respond to their social impact. The purpose to empower the digital economy can be achieved through being reliable and enhancing access to financial services to include everyone in the digital economy while cash is used less frequently. The digital transformation can have the potential for expanding access of disadvantaged or unbanked groups to financial services and reduce poverty. Financial inclusion aims at integrating economic agents into the financial system in order to improve economic development but also quality of life. Financial inclusion through digitalization enables accessible and available financial services to people and companies and hence, facilitates to implementation of Sustainable Development Goals. This paper explores the relationship between digitalization, financial inclusion, poverty and sustainability for Balkan countries. It discusses the potential of financial inclusion for economic development. The paper concludes that digitalization improves accessibility to financial services and contributes to the accomplishment of Sustainable Development Goals. In addition, Remittance inflow, globalization and compliance with the law (measured as role of law index) decreasing poverty in these countries.
References
Abu Daqar, M., Constantinovits, M., Arqawi, S., & Daragmeh, A. (2021). The role of Fintech in predicting the spread of COVID-19. Banks and Bank Systems, 16(1), 1-16. https://doi.org/10.21511/bbs.16(1).2021.01
Andrei, J. V., Panait, M., & Voica, C. (2018). Challenges and approaches for the corporate social responsibility and human resource management in the financial sector. Economics, management and financial markets, 13(3), 415-431.
Arogundade, S., Biyase, M., & Bila, S. (2022). Be Nice to Thy Neighbors: Spatial Impact of Foreign Direct Investment on Poverty in Africa. Economies, 10(6), 128. https://doi.org/10.3390/economies10060128
Avais, M. (2014). Financial innovation and poverty reduction. International Journal of Scientific and Research Publications, 4(1), 2250-3153. https://www.ijsrp.org/research-paper-0114/ijsrp-p2519.pdf
Benmelech, E., Frydman, C., & Papanikolaou, D. (2019). Financial frictions and employment during the great depression. Journal of Financial Economics, 133(3), 541-563. https://doi.org/10.1016/j.jfineco.2019.02.005
Boeddu,G. L., Chien, J., Grady,R. C., Istuk, I. (2021). Consumer Risks in Fintech - New Manifestations of Consumer Risks and Emerging Regulatory Approaches: Policy Research Paper. Finance, Competitiveness and Innovation Global Practice Washington, D.C., World Bank Group. http://documents.worldbank.org/curated/en/515771621921739154/Consumer-Risks-in-Fintech-New-Manifestations-of-Consumer-Risks-and-Emerging-Regulatory-Approaches-Policy-Research-Paper
Boustanifar, H. (2014). Finance and employment: Evidence from U.S. banking reforms. Journal of Banking & Finance, 46, 343-354. https://doi.org/10.1016/j.jbankfin.2014.06.006
Danisman, G. O., & Tarazi, A. (2020). Financial inclusion and bank stability: Evidence from Europe. The European Journal of Finance, 26(18), 1842-1855. https://doi.org/10.1080/1351847x.2020.1782958
Demir, A., Pesqué-Cela, V., Altunbas, Y., & Murinde, V. (2020). Fintech, financial inclusion and income inequality: A quantile regression approach. The European Journal of Finance, 1-22. https://doi.org/10.1080/1351847x.2020.1772335
Demirguc-Kunt, A., Klapper, L., Singer, D., Ansar, S., & Hess, J. (2018). The Global Findex Database 2017: Measuring Financial Inclusion and the Fintech Revolution. World Bank Group. https://doi.org/10.1596/978-1-4648-1259-0
Driscoll, J. C., & Kraay, A. C. (1998). Consistent covariance matrix estimation with spatially dependent panel data. Review of economics and statistics, 80(4), 549-560. https://doi.org/10.1162/003465398557825
Foroudi, P., Foroudi, M. M., Palazzo, M., & Nguyen, B. (2021). Fly me to the moon: From corporate branding orientation to retailer preference and business performance. International Journal of Contemporary Hospitality Management, 34(1), 78-112. https://doi.org/10.1108/ijchm-12-2020-1424
Geng, Z., & He, G. (2021). Digital financial inclusion and sustainable employment: Evidence from countries along the belt and road. Borsa Istanbul Review, 21(3), 307-316. https://doi.org/10.1016/j.bir.2021.04.004
Gigauri, I. (2021). New Economic Concepts Shaping Business Models in Post-Pandemic Era. International Journal of Innovative Technologies in Economy, 1(33). https://doi.org/10.31435/rsglobal_ijite/30032021/7392
Gigauri, I., Panait, M., & Palazzo, M. (2021). Teaching corporate social responsibility and business ethics at economic programs. In A. Grigorescu & V. Radu (vol. ed.), Lumen Proceedings: Vol. 15. 2nd International Conference Global Ethics - Key of Sustainability (GEKoS) (pp. 24-37). LUMEN Publishing House. https://doi.org/10.18662/lumproc/gekos2021/3
Gomber, P., Koch, J-A., & Siering, M. (2017). Digital Finance and FinTech: Current research and future research directions. Journal of Business Economics, 87(5), 537-580. https://doi.org/10.1007/s11573-017-0852-x
Gosavi, A. (2018). Can Mobile Money Help Firms Mitigate the Problem of Access to Finance in Eastern sub-Saharan Africa? Journal of African Business, 19(3), 343-360. https://doi.org/10.1080/15228916.2017.1396791
Global Partnership for Financial Inclusion. (2022). G20 Financial Inclusion Indicators: Overview. Global Partnership for Financial Inclusion. https://databank.worldbank.org/data/download/g20fidata/G20_Financial_Inclusion_Indicators.pdf
Grigorescu, A., & Ion, A-E. (2021). Qualitative Analysis of Sustainability and Innovation Within the Luxury Business Sector. Journal of the Knowledge Economy, 13, 3150–3171. https://doi.org/10.1007/s13132-021-00835-5
Grigorescu, A., Palazzo, M., Vasile, V., & Panait, M. (2021a). Behaviour of financial consumers in banking market: A central and eastern European perspective regarding gender gap. International Journal of Economic Policy in Emerging Economies, 1(1), 1. https://doi.org/10.1504/ijepee.2021.10038306
Grigorescu, A., Pelinescu, E., Ion, A. E., & Dutcas, M. F. (2021b). Human Capital in Digital Economy: An Empirical Analysis of Central and Eastern European Countries from the European Union. Sustainability, 13(4), 2020. https://doi.org/10.3390/su13042020
Hoechle, D. (2007). Robust standard errors for panel regressions with cross-sectional dependence. The stata journal, 7(3), 281-312. https://doi.org/10.1177/1536867X0700700301
Huang, Y., & Zhang, Y. (2019). Financial Inclusion and Urban–Rural Income Inequality: Long-Run and Short-Run Relationships. Emerging Markets Finance and Trade, 56(2), 457-471. https://doi.org/10.1080/1540496x.2018.1562896
Imai, K. S., Gaiha, R., Ali, A., & Kaicker, N. (2014). Remittances, growth and poverty: New evidence from Asian countries. Journal of Policy Modeling, 36(3), 524-538. https://doi.org/10.1016/j.jpolmod.2014.01.009
Johan, S. (2020). Users’ acceptance of financial technology in an emerging market (An empirical study in Indonesia). Jurnal Ekonomi Dan Bisnis, 23(1), 173-188. https://doi.org/10.24914/jeb.v23i1.2813
Justesen, M. K., & Bjørnskov, C. (2014). Exploiting the poor: Bureaucratic corruption and poverty in Africa. World Development, 58, 106-115. https://doi.org/10.1016/j.worlddev.2014.01.002
Kling, G., Pesqué-Cela, V., Tian, L., & Luo, D. (2020). A theory of financial inclusion and income inequality. The European Journal of Finance, 28(1), 137-157. https://doi.org/10.1080/1351847x.2020.1792960
Kowalewski, O., & Pisany, P. (2020). The Rise of Fintech: A Cross-Country Perspective. Working Paper Series 2020-ACF-07. IESEG School of Management. https://www.ieseg.fr/wp-content/uploads/2020/06/2020-ACF-07.pdf
Omar, M. A., & Inaba, K. (2020). Does financial inclusion reduce poverty and income inequality in developing countries? A panel data analysis. Journal of economic structures, 9(1), 37. https://doi.org/10.1186/s40008-020-00214-4
Ouma, S. A., Odongo, T. M., & Were, M. (2017). Mobile financial services and financial inclusion: Is it a boon for savings mobilization? Review of Development Finance, 7(1), 29-35. https://doi.org/10.1016/j.rdf.2017.01.001
Ozili, P. K. (2018). Impact of digital finance on financial inclusion and stability. Borsa Istanbul Review, 18(4), 329-340. https://doi.org/10.1016/j.bir.2017.12.003
Palazzo, M., Gigauri, I., Panait, M. C., Apostu, S. A., & Siano, A. (2022). Sustainable Tourism Issues in European Countries during the Global Pandemic Crisis. Sustainability, 14(7), 3844. https://doi.org/10.3390/su14073844
Panait, M., Voica, C., Palazzo, M., & Siano, A. (2021). CSR of foreign banks from Central and Eastern Europe: An international comparison. European Journal of International Management, 1(1), 1. https://doi.org/10.1504/ejim.2021.10040798
Park, C-Y., & Mercado, R. (2018). Financial inclusion, poverty, and income inequality. The Singapore Economic Review, 63(1), 185-206. https://doi.org/10.1142/s0217590818410059
Puime, F., Panait, M., Andrei, J. V., & Gigauri, I. (2022). Non-financial Performance of Energy Companies Listed on the Bucharest Stock Exchange and Relevance for Stakeholders. In A. M. Dima, & M. Kelemen (Eds.), Digitalization and Big Data for Resilience and Economic Intelligence. Springer Proceedings in Business and Economics (pp. 183-201). Springer. https://doi.org/10.1007/978-3-030-93286-2_14
Raimi, L., Panait, M., & Hysa, E. (2021). Financial Inclusion in ASEAN Countries – A Gender Gap Perspective and Policy Prescriptions. In A. Grigorescu & V. Radu (vol. ed.), Lumen Proceedings: Vol. 15. 2nd International Conference Global Ethics - Key of Sustainability (GEKoS) (pp. 38-55). LUMEN Publishing House. https://doi.org/10.18662/lumproc/gekos2021/4
Ramoutar, E. (2017). The Investment Cost of Currency Crises in Emerging Markets: An Empirical Treatment from 1994-2015. Duke University. https://dukespace.lib.duke.edu/dspace/handle/10161/14262
Ratha, D. (2013). The impact of remittances on economic growth and poverty reduction. Policy Brief, 8(1), 1-13. https://www.migrationpolicy.org/pubs/Remittances-PovertyReduction.pdf
Tchamyou, V. S., Erreygers, G., & Cassimon, D. (2019). Inequality, ICT and financial access in Africa. Technological Forecasting and Social Change, 139, 169-184. https://doi.org/10.1016/j.techfore.2018.11.004
Thompson, S. B. (2011). Simple formulas for standard errors that cluster by both firm and time. Journal of financial Economics, 99(1), 1-10. https://doi.org/10.1016/j.jfineco.2010.08.016
Turégano, D. M., & Herrero, A. G. (2018). Financial inclusion, rather than size, is the key to tackling income inequality. The Singapore Economic Review, 63(1), 167-184. https://doi.org/10.1142/s0217590818410047
Vasile, V., Panait, M., & Apostu, S-A. (2021). Financial Inclusion Paradigm Shift in the Postpandemic Period. Digital-Divide and Gender Gap. International Journal of Environmental Research and Public Health, 18(20), 10938. https://doi.org/10.3390/ijerph182010938
Vogelsang, T. J. (2012). Heteroskedasticity, autocorrelation, and spatial correlation robust inference in linear panel models with fixed-effects. Journal of Econometrics, 166(2), 303-319. https://doi.org/10.1016/j.jeconom.2011.10.001
World Bank. (2018). UFA2020 Overview: Universal Financial Access by 2020. World Bank. https://www.worldbank.org/en/topic/financialinclusion/brief/achieving-universal-financial-access-by-2020
World Bank. (2022). Financial Inclusion: Overview. World Bank. https://www.worldbank.org/en/topic/financialinclusion/overview
You, K., Dal Bianco, S., & Amankwah-Amoah, J. (2020). Closing technological gaps to alleviate poverty: evidence from 17 sub-saharan african countries. Technological Forecasting and Social Change, 157, 120055. https://doi.org/10.1016/j.techfore.2020.120055
Zhang, Q., & Posso, A. (2019). Thinking Inside the Box: A Closer Look at Financial Inclusion and Household Income. The Journal of Development Studies, 55(7), 1616-1631. https://doi.org/10.1080/00220388.2017.1380798
Zhang, X., Zhang, J., Wan, G., & Luo, Z. (2020). Fintech, growth and inequality: Evidence from china’s household survey data. The Singapore Economic Review, 65, 75-93. https://doi.org/10.1142/s0217590819440028
Copyright (c) 2023 LUMEN Proceedings
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Selection and peer-review under responsibility of the Organizing Committee of the conference.
This is an Open Access article distributed under the terms of the Creative Commons Attribution-Noncommercial 4.0 Unported License, permitting all non-commercial use, distribution, and reproduction in any medium, provided the original work is properly cited.
© LUMEN Proceedings Series 2022 . The LUMEN Proceedings Open Access volumes are distributed under the terms of the 