This study aims to assess the effect of financial inclusion and competitiveness on banks’ financial stability, considering the moderating role of financial regulation. To do so, we compare the effects of these variables in Sub-Saharan African (SSA) and Latin American and Caribbean (LAC) countries. Our results suggest that inclusion enhances bank stability in SSA and LAC countries, and financial regulation contributes to increasing financial stability in LAC countries, while we find no statistical significance in the effect of financial regulation on financial stability in SSA countries. Moreover, competitiveness negatively impacts financial stability, and financial regulation moderates the negative effect of competitiveness on financial stability in SSA and LAC countries. We also find that financial inclusion reduces credit risk in SSA countries, and for LAC countries financial inclusion increases credit risk and reduces bank profitability. Regarding the practical implications, this study shows that fostering financial inclusion in the countries under study contributes significantly to improving the welfare of households and especially to the stability of the financial system. The present study allows expanding of the scarce literature by examining the effect of financial inclusion and market structure on financial stability in two different samples, consisting of 41 countries in the SSA region and 31 countries in the LAC region, throughout 2005–2018.

Monetary policy ensures the financial system stabilization. Financial inclusion, characterized by the access and use of available financial services (credit, savings, payments, insurance at a low cost), by a broader population, may explain the effectiveness of the monetary policy, especially in developing countries. The objective of this study is to carry out a comparative analysis between the countries of Sub-Saharan Africa (SSA) and the countries of Latin America and the Caribbean (LAC), on the causal relationship between financial inclusion and monetary policy, as well as to assess the impact of financial inclusion over monetary policy. To support our study, we applied the panel vector autoregressive (PVAR) methodology, simple panel data models, and a feasible generalized least squares (FGLS) model. Results provide strong evidence of the existence of reverse causality between financial inclusion and monetary policy in both SSA and LAC, with monetary policy facilitating financial inclusion in both regions. Financial inclusion increases the effectiveness of monetary policy in SSA, while for LAC financial inclusion improves the efficiency of monetary policy. Thus, increased access to and use of financial services increase the efficiency of monetary policy in controlling inflation. Governments are encouraged to design or enhance policies that expand financial services, as well as to promote investment in financial inclusion in developing countries, to maintain the monetary system stability.

The purpose of this study is to examine the ability of financial literacy, financial innovation, and financial inclusion to mitigate the adverse effect of corruption on banks’ credit risk, profitability, and financial stability, with this joint inclusion being the novelty explored. Furthermore, we aim to compare the results across four different groups of countries, namely African, Asian, American, and European countries. The Feasible Generalized Least Squares (FGLS) estimation results indicate that corruption increases credit risk, reducing profitability and bank stability, being these effects mitigated by financial literacy, financial innovation, and financial inclusion. Furthermore, we find that financial literacy, financial innovation, and financial inclusion reduce credit risk while increasing bank profitability and stability. These results enable policymakers and managers to promote inclusion, innovation, and financial literacy to achieve banking sector stability while combating corruption.

Financial inclusion is a widely used measure to improve the living standards of households and foster inclusive economic growth. Thus, financial inclusion is one of the main policy objectives in developing countries. Besides, financial regulation (capital adequacy requirement) is a policy measure used to ensure financial stability. The objective of this study is to examine the effect of financial regulation on competitiveness and financial inclusion in 15 countries in the SADC (Southern Africa Development Community) region and 8 countries in the SAARC (South Asian Association for Regional Cooperation) region over the period 2005–2018. The result of Feasible Generalized Least Squares (FGLS) estimation suggests that financial regulation reduces competitiveness and hampers financial inclusion in the banking sector in the two regions. Furthermore, we find that financial stability moderates the negative effect of financial regulation on competitiveness and financial inclusion, meaning that financially stable banks remain competitive and normally offer financial products and services even if strong capital adequacy requirements are implemented. Additionally, we find that competitiveness increases financial inclusion in countries in the SADC region. The policy implication of this study focuses on regulatory flexibility to preserve the need for greater financial inclusion in the two regions. As for the practical implication, the study calls for strategic measures to preserve stability such as complementing financial inclusion with financial literacy, fostering corporate governance.

Purpose: This study aims to examine the impact of financial inclusion and financial innovation on corruption, considering the moderating role of education, as well as identify the specific modality of digital inclusion and payments that contribute to corruption reduction.Design/methodology/approach: The study uses a representative sample consisting of 46 African countries in three different years 2011, 2014 and 2017. On the data, feasible generalized least squares (FGLS), instrumental variables – two stages least squares (IV-2SLS) and two-stage generalized method of moments (IV-2GMM) model estimation methods were employed.Findings: The results suggest that financial inclusion and education significantly reduce corruption. As well, the interaction between financial inclusion and education reduces corruption. Additionally, the authors find that the expansion of bank credit and the use of credit and debit cards are the specific modes of financial inclusion and digital payments that can contribute to corruption reduction.Research limitations/implications: This study awakens policymakers in African countries about the need to consider education as an alternative measure to support financial inclusion and reduce the use of physical cash in transactions for an effective fight against corruption.Practical implications: Regarding practical implications, the study shows that financial inclusion besides reducing poverty for households can contribute to macroeconomic stability in Africa.Originality/value: The study uses a representative sample composed of 46 African countries and considers the role of education in moderating the relationship between financial inclusion and financial innovation on corruption. Furthermore, the study identifies the specific modality of financial inclusion and digital payments that contribute to corruption reduction.

Purpose: The paper aims to investigate the relationship between institutions and economic growth in developing countries, considering the role of financial inclusion, education spending and military spending.Design/methodology/approach: The study employs dynamic panel analysis, specifically two-step system generalized method of moments (GMM), on a sample of 61 developing countries over the period 2009–2020.Findings: The results confirm that weak institutional quality, weak financial inclusion and increased military spending are barriers to economic growth, conversely, increased spending on education and gross capital formation contribute to economic growth in developing countries. Regarding the specific institutional factor, we find that corruption, ineffective government, voice and accountability and weak rule of law contribute negatively to growth.Practical implications: The study calls for strengthening institutions so that the financial system supports economic growth and suggests increasing spending on education to improve access to and the quality of human capital, which is an important determinant of economic growth.Originality/value: The study contributes to scarce literature by empirically analyzing the relationship between institutions and economic growth by considering the role of financial inclusion, public spending on education and military spending, factors that have been ignored in previous studies. In addition, the study identifies the institutional dimension that contributes to reduced economic growth in developing countries.