Financial inclusion and sustainable development: an empirical association

Abstract

PurposeThis paper aims to investigate the association between financial inclusion and sustainable development in a global context.Design/methodology/approachThe study used two datasets, and employed the Pearson correlation analysis and granger causality test to examine the correlation and pairwise causality between financial inclusion and sustainable development.FindingsHigh levels of financial inclusion (in terms of higher commercial bank branches per 100,000 adults) is significantly associated with higher electricity production from renewable sources, higher industry productivity, higher adult literacy rate and higher renewable electricity output. Also, higher financial inclusion is significantly associated with low combustible renewables and waste. There is a uni-directional granger causality between global interest in internet information about sustainable development and global interest in internet information about financial inclusion, particularly in the period after the global financial crisis but before the COVID-19 pandemic.Practical implicationsThe correlation between financial inclusion and sustainable development depends on the indicators employed to measure financial inclusion and sustainable development. The results support global calls for greater financial inclusion and the speedy attainment of the sustainable development goals for the good of all people, the environment and for the planet.Originality/valueThis paper is the first study in the literature to analyze the link between financial inclusion and sustainable development using global data. This study contributes to the existing literature by investigating the association between financial inclusion and sustainable development in a global context.