Economic Empowerment: The Role of Digital Financial Inclusion in Boosting Gross National Income in Upper-Income Countries

Abstract

The objective of this study is to examine the impact of the digital financial inclusion index on Gross National Income per Capita in upper-income countries. Using the Principal Components Analysis (PCA) method, the study has constructed a digital financial inclusion index with the data collected from the World Development Indicator for the years 2011–2021. Further, utilizing the Generalized Moments of Method (GMM) technique, the findings reveal a significant positive effect of the digital financial inclusion index on income levels, emphasizing the importance of inclusive financial systems for broader economic participation. Additionally, bank branches remain important, highlighting their complementary role alongside digital services. Moreover, savings significantly contribute to economic growth and stability. Lastly, ATMs play a positively significant role in raising economic development and increasing income levels. Policymakers should prioritise initiatives that enhance digital financial inclusion, strengthen traditional banking infrastructure, and encourage savings. Additionally, investments in accessible banking services, such as ATMs, can significantly contribute to advancing economic development and increasing income levels.