An asymmetric analysis of overall globalization on financial inclusion

Abstract

Purpose Financial inclusion is acknowledged as a critical facilitator of the United Nations Sustainable Development Goals agenda for 2030. Therefore, this study aims to examine the asymmetric role of overall globalization on financial inclusion by controlling economic growth, urbanization and population for the selected South Asian countries. Design/methodology/approach Applying the nonlinear autoregressive distributed lag approach to cointegration explores the impact of overall globalization on financial inclusion in the presence of additional variables like economic growth, urbanization and population in the designed financial inclusion function. Findings The estimated econometric outcomes show that increasing overall globalization fosters financial inclusion while decreasing overall globalization reduces financial inclusion. Furthermore, a positive (negative) change in economic growth leads to an increase (decrease) in financial inclusion while varying short-run findings. Moreover, both positive and negative changes increase financial inclusion in the long run in connection with urbanization. Although the short-run results are not significant, the study finds that an increase (decrease) in population leads to a decrease (increase) in financial inclusion. Finally, to support the promotion of financial inclusivity throughout South Asia, several policies pertaining to financial inclusion are suggested. Originality/value To the best of the authors’ knowledge, this is the first study to examine the asymmetries related to overall globalization on financial inclusion by controlling economic growth, urbanization and population.