The Effects of Corruption on Financial Inclusion (A System Generalized Method of Moments approach)

Subject Areas : Labor and Demographic Economics

Farzad Rahimzadeh ¹ , Siamak Shokouhifard ² , Hatef Hazeri Niri ³

1 - Assistant Professor, Department of Economic and Accounting, Faculty of Literature and Humanities, University of Guilan, Rasht, Iran
2 - Department of Economics, Payame Noor University (PNU), P.O BOX, 19395- 4697 Tehran, Iran
3 - Associate Professor of Economics, Department of Economics, Faculty of Social Sciences, University of Mohaghegh Ardebili, Ardebil, Iran

Received: 2021-11-25 Accepted : 2022-06-05 Published : 2022-06-20

Keywords: Corruption, Generalized method of moments, Financial inclusion, Selected Countries of the Organization of Islamic Cooperation (OIC),

Abstract :

The purpose of this article is to investigate the effect of corruption on financial inclusion in Iran and selected member countries of the Organization of Islamic Cooperation during the period 2005- 2020. For this purpose, three variables have been used to measure financial inclusion and three separate models were estimated. The results of model estimation using the System Generalized Method of Moments (SGMM) showed that at a significant level of 5%, lagged financial inclusion, the level of per capita GDP and education have a positive and significant effect on financial inclusion. Also, the impact of corruption on financial inclusion is negative and significant. At a significance level of 5%, the expansion of Internet users and mobile subscribers has a positive and significant effect on financial inclusion. The high share of women in the total population has a significant and negative effect on financial inclusion. Based on the results, it is suggested that policymakers reduce the level of corruption and increase financial inclusion by reducing wide monopolies, eliminating the rent, improving the quality of regulations and creating widespread transparency.

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