Nexus between Information and Communication Technology, Financial Intermediation, and Household Investment: A Review

PurposeThis study aims to examine the impact of financial inclusion on per capita gross domestic product (GDP) at varying degrees of financial inclusion for a sample of 76 developing countries between 2011 and 2017. To evaluate the heterogeneous impact, this paper constructs the multi-dimension index of financial inclusion to classify sample countries into two sub-samples in terms of the value of FIID, taking account of three dimensions of financial inclusion: access, usage and availability.Design/methodology/approachThis study attempts to identify the presence of reverse causality and long-run relationship between financial inclusion and economic growth by using the Granger causality test (Wald test) and three alternative panel cointegration tests (Kao Test, Pedroni Test, Westerlund Test) respectively. Because of the existence of the bi-directional causality between financial inclusion and per capita GDP, this study uses a fixed effect instrumental variable model with lagged dependent variable to get unbiased estimators from the panel regressions for sample countries.FindingsThis paper finds a strong positive impact of financial inclusion on per capita GDP growth in sample developing countries, controlling for labor market structure, financial institutions’ efficacy, infrastructural and governance issues. This study suggests that economic growth will be high in developing economies with a higher level of financial inclusion; however, the positive impact for two sub-samples countries (low and medium level of inclusion and high level of inclusion) are heterogeneous. The estimated result explains that a 1% increase in the financial inclusion index leads to a 0.0153% point increase in the per capita GDP for the countries with a low and medium level of financial inclusion, while this positive impact is significantly higher, 0.0794% point for countries with the high level of financial inclusion. This study also suggests that the higher concentration in the financial market by few agents and the lower level of governance may have an adverse impact on economic growth for the economies with a low and medium level of financial inclusion.Originality/valueThis study is an original study that contributes to the research gap by explaining the heterogeneous impact of financial inclusion on economic growth at varying degrees of inclusion in the two sub-sample countries. Moreover, this study posits greater appeal as it explores the issue using the sample of only developing economies.

Information and Communication Technologies (ICTs) are major drivers of social and economic change. They are also one of the key Thematic Objectives (TOs) in the European Structural and Investment Fund (ESIF). The aim of these funds is to strengthen economic, social and territorial cohesion within the European Union. ICTs not only constitute an important sector themselves, but are also an important enabler of other sectors. This is why, analysis of ESIF data on planned ICT investments show EUR 12.2 billion encoded in the dedicated TO, but when ICT categories in other TOs are included, this amount almost doubles, to EUR 21.4 billion.\nFinding out more about the ICT investment plans of EU Member States and regions is not always a straightforward process. The available data for ESIF are structured in TOs and Categories of Intervention (CoIs); however, ICT investment often funds activities beyond the dedicated TOs and CoIs. To obtain a better picture of planned ICT investments, the European Commission Directorate General for Communications Networks, Content & Technology (DG CONNECT) and the JRC Institute for Prospective Technological Studies (JRC-IPTS) have developed an online tool to display planned ICT investment data on a regional basis. This tool will help EC officials, national and regional policymakers working on ICT issues, and beneficiaries of ESIF, to understand what kind of ICT activities are being planned in Europe.\nThe ICT monitoring tool can be searched using a number of predefined filters, or searches of TOs and CoIs can be customised. The tool also contains a database of keywords built up by a semantic search for keywords in Operational Programmes (OPs). This database allows the user to identify OPs that mention a number of ICT activities more frequently than others, and to identify if a specific topic is mentioned in a region at all. The data set included in the tool is based on an in-depth study of individual OPs, as well as on aggregated data sets.\nWhen studying the available data, we found that Thematic Objective 2 (TO2) does not account for all planned ESIF investments in ICT. Using a broader set of CoIs, planned spending on ICT almost doubled, from 3.8 % to around 6.6 % of the combined total of European Regional Development Funds (ERDF), the European Social Fund (ESF), Cohesion Funds (CF) and European Agricultural Fund for Rural Development (EAFRD). However, it is likely that even this method fails to capture all planned investments, as respondents to our study indicated that substantial investments in ICT will be allocated to other categories, which would increase ESIF investments in ICT to EUR 35.5 billion. However, this estimate is not currently included in the tool, as the methods of estimating investments are not judged to be adequate. This range of different amounts of investment reflects the dual nature of ICT as an important sector and activity in itself, as well as an enabling technology in other public and private activities.\nTaking the moderate estimates, the EU Member States that plan by far the largest investments in ICT in absolute terms are Poland, Italy and Spain; the regions with the largest planned investments are Campania (IT), Sicilia (IT), Andalucía (ES), Slaskie (PL) and Puglia (IT). For example, the region of Campania plans to invest more ESIF in ICT than the whole of Germany. The greatest investments will be in broadband and ICT infrastructures (EUR 6.9 billion), e-Inclusion and digital skills (EUR 3.9 billion), e-Government (EUR 3.4 billion), and smart cities and smart grids (EUR 3.1 billion).\nTo get a more in-depth view of future plans, we carried out a keyword search of ESIF data. Among the most frequently mentioned keywords are ICT innovation, e-Inclusion, broadband and digital content. This is partly because these keywords are broad and all-encompassing, but the findings also reflect the ambition of many regions to invest in ICT-based innovation activities. Quite substantial ICT investments will go to ICT-based innovation and digital content, but this will be listed under CoIs related to support of small and medium-sized enterprises (SMEs) and research and innovation, rather than the core CoIs for planned ICT investments.

PurposeThe national and global digital transformation makes investments in information and communications technology (ICT) by financial institutions a necessity, not only for gaining a competitive advantage but also for expanding their knowledge and learning about their customers. This study assesses the business value of ICT investments by financial institutions using a mixed-method approach.Design/methodology/approachThis study adopted a mixed-method approach. First, financial data were gathered from Omani banks' annual financial reports and through a longitudinal quantitative analysis in order to assess the value of ICT in financial institutions' profitability performances. Second, a Delphi qualitative approach was utilized in order to further assess how top managers view the impact of ICT investments in different aspects of business. We used an extended balanced scorecard (finance, customer, internal process and learning and growth) and a sector perspective to address how future ICT investments can offer value that goes beyond traditional metrics of profitability.FindingsThe results of the longitudinal study demonstrated significant evidence of the impact of ICT investment on finance performance indicators; ICT value is significantly positive. Furthermore, the results indicated that there is an acceptable consensus among business and ICT managers that ICT is linked to performance indicators beyond financial; ICT value is linked also to customer indicators, internal process indicators and learning and growth indicators in addition to sector indicators.Originality/valueICT is vital for a diversified and knowledge-based economy, especially for developing countries, because modern banking and financial institutions are relatively new in economies such as those that had previously relied on cash and informal financing institutions. Therefore, continued ICT investments face challenges and may not succeed. Most of the existing literature on ICT value has focused on tangible financial performance indicators. The financial evaluation of intangible performance indicators of ICT investments still remains a problematic area of high relevance to decision-makers. The present study provides an integrated assessment that enables financial institutions to develop their strategies and assessments in terms of ICT investments and to go beyond typical, tangible financial profitability indicators. Furthermore, it integrates assessment indicators that are beyond organizations themselves and reaches sectors and countries. This type of investigation is limited in the literature yet important for the financial sector as it is highly integrated by nature and critical to the development of a nation's economy.

The framework of neoclassical growth accounting is widely used to estimate the impact of investments in information and communication technologies (ICT) on the macroeconomic bottom line. Results of multiple investigations presented evidence that investments in ICT have a positive impact on such measure of macroeconomic outcome as gross domestic product. Thus, it is not surprising that less developed countries of the world often turn to investments to ICT as one of the sources of a sustained economic development. But sustainability of economic growth is predicated on the sustainability of the sources of growth, such as investment capital and labor. The question of how annual investments in ICT are sustained is an important one, and yet it was not given much research consideration. This is, in part, due to the absence of a theoretically sound framework outlining mechanisms of investments → outcomes → reinvestments process. In this study, we synthesize a consistent with the framework of neoclassical growth accounting model allowing for investigating the process by which various microeconomic outcomes of investments in ICT are associated with re-investments in ICT. We test the proposed model using techniques of structural equation modeling with the data on investments in telecoms (a common subset of investments in ICT) in the context of transition economies. The results of the investigation support the notion of cyclical relationship between investments in ICT and economic outcomes [Qureshi, S. (2013). What is the role of mobile phones in bringing about growth? Information Technology for Development, 19(1), 1–4] and offer valuable insights to decision- and policy-makers tasked with the responsibility of improving the impact of investments in ICT.

Indonesia's population is dominated by productive age, which is expected to contribute to boosting economic growth and improving people's welfare. The number of the young generation (Generation Z) is an advantage for Indonesia's demographics as well as opportunities and challenges in carrying out digital transformation, both in financial literacy and in the provision of products and services. However, the Financial Services Authority (OJK) in 2019 stated that the level of financial literacy and financial inclusion in Indonesia remains low. This condition might be due to the lack of understanding to the various financial products and services offered by formal financial services institutions. Significantly, Generation Z has realize responsibility for their financial condition and is starting to honourably the importance of investing. Therefore in this study, the level of financial literacy and inclusion of Generation Z in Jabodetabek was studied in order to analyze the effect on investment interest in the capital market. Descriptive analysis and Structural Equation Modeling (SEM) – PLS analysis were used for data generation. The results of this study reveal that the level of financial literacy and the average financial inclusion of Generation Z in Jabodetabek are in the well literate category, financial literacy has no effect on investment interest, in contrary, the financial inclusion has an effect on investment interest.

PurposeThis study is important in measuring the role of investment in information and communication technology (ICT), financial inclusion and governance indicators on environmental performance in Organization for Economic Co-operation and Development (OECD) economies. Hence, this study aims to explore the strategies for decarbonization and improve sustainable development through technological innovation and governance improvement.Design/methodology/approachThis study used the pool mean group–autoregressive distributed lag methodology to measure the short- and long-term effects of ICT investment, financial inclusion and governance indicators on environmental performance. It covered data from 1991 to 2022 from 25 OECD countries.FindingsThis study observed stationarity of the variables at the first difference, weak correlation between the variables, strong cross-section dependency and cointegration among the variables. The findings also observed that investment in ICT with private participation, financial inclusion, rule of law and government effectiveness significantly decline the level of CO2 emission both in the short and long term. Besides, voice and accountability increase the level of CO2 emission and strongly affect the environmental performance of OECD economies.Practical implicationsPolicymakers of the OECD countries can improve environmental performance by encouraging ICT investment, expanding financial inclusion and improving the governance frameworks. Policymakers must initiate by encouraging green finance, improving resource efficiency and efficient waste management can raise the environmental performance. The adverse effect of voice and accountability on environmental performance needs refining governance frameworks to support them with environmental goals.Originality/valueThis study provides a new insight into the existing literature by incorporating ICT investment, financial inclusion and governance indicators in a unified framework for improving environmental performance. This study provides a new perspective on how the selected variable plays a significant role in decarbonization and achieving sustainable development. This study also provides a framework for decision-makers to combat climatic issues by improvising good governance.

PurposeThis study aims to investigate the impact of information and communication technology (ICT) investment on the micro, small and medium enterprises (MSME) profitability in the Indian context.Design/methodology/approachThis study used a framework based on the ICT investment and firm size, measuring the impact on profit before depreciation, interest, tax and amortisation of MSME by taking a random sampling of 300 Indian MSME manufacturing firm’s secondary data from the Prowess database. This framework was analysed using the design of experiment (DoE) technique.FindingsThe study showed that ICT investment has a significant positive relationship with profitability. This study examines the different ICT investment levels to predict investment strategies and fine-tune profit targets. The critical finding is that ICT investment maximises profit at one million rupees. This discovery aids MSME leaders’ sustainable business decision-making.Research limitations/implicationsThis study has an explicit limit to the Indian context, where the firm requirements of countries are different, and these findings need to be validated with many operating variables and applied to more firms with more data. Even so, as a theoretical implication, this study took a novel approach to ICT adoption (through ICT investment) in the Indian MSME sector with guiding levels of ICT investment for each type of firm (i.e. micro, small and medium). This study opens new avenues for investigating researchers and stakeholders by exploring other factors responsible for ICT adoption.Practical implicationsThis study uniquely provides practitioners with the functional level of ICT investment for MSMEs in the Indian context. These finding guides top management to make strategic ICT adoption decisions with information symmetry. At the same time, these findings suggest financial institutions astern their credit programme to provide credit for ICT investment in MSMEs.Social implicationsThis study highlights the value of ICT as a practical resource for business owners that significantly makes MSMEs more informed and profitable, thus creating more jobs and incrementing the country’s gross domestic product (GDP).Originality/valueThis study offers unique empirical findings on how decision makers in MSMEs maximise profits through optimal ICT investment levels depending upon the firm size in an emerging economy like India. There is evidence in the study to conclude that ICT is a need of MSME and has implications for firm performance.

Financial inclusion is an important national subject, sustained by the European Union policies. Financial inclusion has an outstanding role in growing the quality of life of citizen, and financial inclusion can be accomplished both through educational programs and through programs which facilitate access to financial products and services. The financial inclusion score, a very useful instrument, can be influenced by many factors in order to decrease the major gap between the urban and rural environment. In this paper, we analyze the level of financial education and inclusion of Romanians, the barriers that are encountered and giving solutions to enhance the level of financial inclusion in Romania. The low levels of financial inclusion can be improved by the government through public polices mainly, but also in partnership with banks or other non-governmental institutions, regarding digitalization, financial education and fiscal and non-fiscal policies.

Pradhan Mantri Jan Dhan Yojana is a Nationwide financial inclusion scheme launched on 28th Aug 2025, with the aim to provide zero-balance bank accounts to the unbanked population and to promote financial inclusion and formalization of the economy. Financial inclusion in this study refers to the extent to which the working-age population (18–59 years) can access and utilize formal banking services, as measured by account ownership, deposit balances, and the use of digital payment methods. This study aims to compare the level of financial inclusion across Indian states and Union Territories through the PMJDY using selected quantitative indicators. Methodology: The research relies on secondary data, which were gathered from journals, reports, and data retrieved from PMJDY website. This study constructs a composite Financial Inclusion Index using three key dimensions—banking penetration, disbursement, and financial services—and classifies Indian states into high, medium, and low inclusion categories based on their index scores, which range along a continuum from 0 to 1. Findings: This study shows notable differences in financial inclusion levels between states under PMJDY. Few states and Union Territories, such as Assam, Chhattisgarh, West Bengal, Jharkhand, Odisha have high levels of inclusion. Findings of the study reveals that 8 out of 36 States/UTs showed high progress in FI, other 13 shows moderate inclusion and 15 falls to low level of financial inclusion. Originality: This paper constructs a nationwide Financial Inclusion Index using PMJDY indicators across Indian states. By integrating access, usage, and service dimensions into a single composite measure, the study reveals inter-state disparities and offers a structured framework for evaluating the effectiveness of financial inclusion policies in India.

Purpose- Financial inclusion means individuals and businesses have access to useful and affordable financial products and services to deliver their needs in a responsible and sustainable way. A financial sector is measured and compared on four main features; debt is the size of financial institutions, access is the access and use of financial services by the users, efficiency is the efficiency in the provision of financial services, and stability is the stability in the provision of financial services. The purpose of this paper is to measure the level of financial inclusion of Turkey and Greece from 2000 to 2020 and compare its relationship with the economic growth and income inequality of both countries. Methodology- The World Bank data covering the 2000-2020 period is extracted from Turkey and Greece from the world bank report. The whole financial system for both countries is defined as a combination of banks, nonbanks financial institutions, and stock exchange markets. The related indicators for each of the subsectors of the financial system are determined for banks, nonbanks financial institutions, and stock exchange markets. Thus, 32 indicators for banks, 6 indicators for nonbanks, and 16 indicators for stock exchange markets are determined for the financial inclusion index. All indicators are in percentages. All individual indicators are summed for the computation of subsectoral indexes and then the growth rate in each subsectoral indexes are computed. The growth rates of each subsectoral index are summed and weighted by the subsectoral asset sizes or trading volüme. Finally, the causal relationship between the financial inclusion index, Gini coefficient, Poverty Headcount ratio, and GDP per capita was examined. Findings- The average growth rate for the financial inclusion index for the 21 years is 2,83% for Turkey and 0,97% for Greece. According to the analysis, we found that the financial inclusion index Granger-cause GDP per capita, Gini index Granger-cause financial inclusion index and there is a bidirectional relationship between the financial inclusion index and Poverty Headcount ratio for Turkey. On the other hand, there is a bidirectional relationship between GDP per capita and the financial inclusion index and a bidirectional relationship between the financial inclusion index and the Poverty Headcount ratio for Greece. Conclusion- Financial inclusion simply means a larger size of financial institutions and a variety of financial products and services available for the use of adult individuals, businesses, and governmental agencies. Economic growth is supported and accelerated by an increase in financial inclusion. The empirical analysis supports the literature that the growth in the financial inclusion index enhances a higher growth in GDP and a much higher growth in GDP per capita for both Turkey and Greece. The project titled “Istanbul as an International Financial Center” may easily improve the level of financial inclusion in Turkey. Keywords: Financial inclusion, economic growth, income inequality, financial indicators, Turkish and Greek financial markets JEL Codes: G40, G41

Financial inclusion of the region is a means of making full use of the financial services industry's tools, which ultimately contributes to the long-term economic growth of the region, as it stimulates innovation, mobilizes savings and supports investment. The paper analyzes the current level of financial inclusion of the Poltava region. The study showed that the current level of financial inclusion of the Poltava region is low. Surveys of the respondents showed that there is a large disproportionate level of financial inclusion among urban and rural population. The rural population is limited in financial services. There is still a significant lack of confidence in financial institutions. All this slows down the processes of full involvement of the population in financial inclusion and creates a shadow sector. However, remediation is observed in urgent action by both the state and local authorities and financial institutions. Continuous information in the media and social networks in the future will be able to restore confidence in financial institutions and thus increase not only the level of financial inclusion, but also every inhabitant of the Poltava region.

Financial inclusion of the region is a means of making full use of the financial services industry's tools, which ultimately contributes to the long-term economic growth of the region, as it stimulates innovation, mobilizes savings and supports investment. The paper analyzes the current level of financial inclusion of the Poltava region. The study showed that the current level of financial inclusion of the Poltava region is low. Surveys of the respondents showed that there is a large disproportionate level of financial inclusion among urban and rural population. The rural population is limited in financial services. There is still a significant lack of confidence in financial institutions. All this slows down the processes of full involvement of the population in financial inclusion and creates a shadow sector. However, remediation is observed in urgent action by both the state and local authorities and financial institutions. Continuous information in the media and social networks in the future will be able to restore confidence in financial institutions and thus increase not only the level of financial inclusion, but also every inhabitant of the Poltava region.

This study investigates the effects of information and communications technology (ICT) on economic growth.Our study focuses on 16 MENA countries from 1995 to 2018.We examine not only the impact of ICT usage and investment but also the moderating role of the quality of national institutions shaping this relationship.The results obtained using the panel ARDL method suggest that while ICT usage drives economic growth, ICT investment alone has a limited effect.Moreover, our research confirms that higher-quality institutions boost the impact of ICT use and investment on economic expansion.These results are essential for policymakers who want to boost ICT's contribution to GDP growth.

Numerous economic studies have highlighted that information and communication technology (ICT) investment expenditure appears to be greater in the field of services, and above all in certain activities such as financial services and wholesale trade, than in industry. This analysis examines whether the investment data compiled by national accountants underestimate productive ICT expenditure, and whether this is more pronounced in the case of industry than for services. For that purpose, we propose an assessment of the size of ICT inputs (termed ‘indirect ICT investment’) in non-ICT investment expenditure for France in 2000. The main result of our analysis is that the amount of ‘indirect ICT investment’ appears to be small, compared with ‘direct ICT investment’, suggesting that the biggest investors in ICT remain services, regardless of whether we consider ‘direct’ or ‘direct’ plus ‘indirect investment’.

This study explores gender-based differences in financial inclusion and empowerment among Bottom of the Pyramid (BOP) consumers in India. Despite efforts toward financial inclusion, BOP individuals—especially those in remote and underserved areas—continue to face challenges in accessing formal financial services. The research investigates not only the accessibility and usage of financial services but also four key dimensions of empowerment: economic, socio-cultural, political, and psychological. Using a structured questionnaire, primary data was collected from 500 BOP consumers across 10 districts. Responses were rated on a five-point Likert scale and analysed using mean score analysis. Findings indicate that both male and female BOP consumers experience a relatively high level of financial inclusion, with men slightly outperforming women in terms of accessibility and usage of financial services such as banks, ATMs, and post offices. However, when it comes to empowerment, female respondents reported slightly higher levels across all four dimensions, suggesting a positive trend toward gender parity. Although the differences are minor, they reveal meaningful insights into how gender influences financial behaviors and empowerment perceptions. The study concludes that gender-sensitive financial policies and targeted outreach efforts are essential to bridging the minor but notable gaps in financial inclusion and empowerment. By addressing these disparities, financial institutions and policymakers can play a crucial role in fostering inclusive growth and socio-economic development in BOP communities.