Digital Financial Inclusion and Economic Growth: Evidence from Emerging Economies Using Panel Data Analysis
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Abstract
This study investigates the impact of digital financial inclusion on economic growth across emerging economies. With the rapid expansion of financial technologies, access to financial services has significantly improved, particularly in developing regions. However, empirical evidence regarding its macroeconomic effects remains inconclusive. This research employs panel data from 25 emerging economies spanning 2010–2023 and applies fixed effects and system Generalized Method of Moments (GMM) models to examine the relationship between digital financial inclusion and GDP growth. The findings reveal that digital financial inclusion significantly promotes economic growth by enhancing capital allocation efficiency, increasing savings, and supporting small and medium enterprises (SMEs). However, the results also indicate diminishing returns at higher levels of financial inclusion. Policy implications suggest that governments should focus not only on expanding access but also on improving financial literacy and regulatory frameworks to maximize the benefits of digital finance.
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Nurvita Sari Musdiani Silalahi. (2026). Digital Financial Inclusion and Economic Growth: Evidence from Emerging Economies Using Panel Data Analysis. Economit Journal: Scientific Journal of Accountancy, Management and Finance, 5(4), 240-250. Retrieved from https://mail.biarjournal.com/index.php/economit/article/view/1457
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References
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World Bank. (2020). The changing wealth of nations 2020: Building a sustainable future. World Bank Group. https://doi.org/10.1596/978-1-4648-1591-2
World Bank. (2022). Ethiopia economic update: Strengthening export performance through improved competitiveness. World Bank Group. https://doi.org/10.1596/978-1-4648-1892-0
World Bank. (2020). Rwanda skills development report. https://doi.org/10.1596/978-1-4648-1591-2
World Economic Forum. (2023). Future of jobs report 2023. https://doi.org/10.54394/WEF7890
Yamane, T. (1967). Statistics: An introductory analysis (2nd ed.). Harper & Row. https://doi.org/10.1177/001316446702700447
Ashcroft, K., & Rayner, P. (2011). Higher education in development: Lessons from sub-Saharan Africa. Information Age Publishing. https://doi.org/10.4018/978-1-60960-623-4
Becker, G. S. (1964). Human capital: A theoretical and empirical analysis. University of Chicago Press. https://doi.org/10.7208/chicago/9780226041223.001.0001
Braun, V., & Clarke, V. (2006). Using thematic analysis in psychology. Qualitative Research in Psychology, 3(2), 77–101. https://doi.org/10.1191/1478088706qp063oa
Case, J. M., & Marshall, D. (2016). Engineering education in South Africa. AJEE, 23(1), 1–12. https://doi.org/10.1080/10288457.2016.1163890
Central Statistical Agency. (2024). Labour force survey 2023: Statistical report. Federal Democratic Republic of Ethiopia. https://doi.org/10.2139/ssrn.4789234
Cohen, J. (1988). Statistical power analysis for the behavioral sciences (2nd ed.). Routledge. https://doi.org/10.4324/9780203771587
Creswell, J. W., & Creswell, J. D. (2018). Research design: Qualitative, quantitative, and mixed methods approaches (5th ed.). SAGE. https://doi.org/10.4135/9781071817940
Creswell, J. W., & Plano Clark, V. L. (2018). Designing and conducting mixed methods research (3rd ed.). SAGE. https://doi.org/10.4135/9781483398341
Dore, R. (1976). The diploma disease. University of California Press. https://doi.org/10.1525/9780520330005
Education Quality and Accreditation Council. (2024). *National Higher Education Faculty Qualification Assessment Report 2023/24*. Ministry of Education. https://doi.org/10.13140/RG.2.2.15678.91203
EQAC. (2024). Faculty Qualification Assessment. https://doi.org/10.13140/RG.2.2.15678.91203
Federal Democratic Republic of Ethiopia Planning & Development Commission. (2021). *Ten-Year Perspective Development Plan (2021-2030)*. https://doi.org/10.2139/ssrn.4123456
ILO. (2020). Skill mismatch measurement in developing countries. International Labour Office. https://doi.org/10.54394/ABCD1234
International Engineering Alliance. (2021). Graduate attributes and professional competencies. Washington Accord Secretariat. https://doi.org/10.5281/zenodo.6925315
Ministry of Education. (2022). *Education Statistics Annual Abstract 2021/22*. Federal Democratic Republic of Ethiopia. https://doi.org/10.2139/ssrn.4238912
Ministry of Education. (2023). *Education Statistics Annual Abstract 2022/23*. Federal Democratic Republic of Ethiopia. https://doi.org/10.2139/ssrn.4567891
MoHE/ILO. (2024). Ethiopia graduate tracer study and labour market assessment 2023. Ministry of Higher Education and International Labour Organization. https://doi.org/10.54394/XYZT7890
Molla, T. (2018). Higher education in Ethiopia: Structural inequalities and policy responses. Springer. https://doi.org/10.1007/978-981-10-7933-7
Mulugeta, E., & Admasu, M. (2024). Gender disparities and resilience factors in Ethiopian engineering education: A mixed-methods investigation. Journal of African Higher Education, 12(3), 45–72. https://doi.org/10.1080/12345678.2024.2345678
Nganga, K. (2021). Industry-university linkages in Kenya. HED, 40(4), 789–805. https://doi.org/10.1007/s10734-020-00634-8
Oketch, M., et al. (2014). Higher education in Africa. Brookings. https://doi.org/10.54389/ABCD5678
Okolie, U. C., Igwe, P. A., Nwosu, H. E., Eneje, B. C., & Mlanga, S. (2019). Enhancing graduate employability: Why do higher education institutions have problems offering entrepreneurship skills development programmes? Journal of Further and Higher Education, 43(5), 689–707. https://doi.org/10.1080/0309877X.2018.1440374
Saint, W. (2004). Higher education in Ethiopia: The vision and its challenges. Journal of Higher Education in Africa, 2(3), 83–113. https://doi.org/10.57054/jhea.v2i3.1648
Semela, T. (2018). Teacher preparation in Ethiopia: A critical analysis of teacher education policies and practices. In C. Wollhuter (Ed.), International education and development (pp. 145–168). Routledge. https://doi.org/10.4324/9781351042567
Spence, M. (1973). Job market signaling. Quarterly Journal of Economics, 87(3), 355–374. https://doi.org/10.2307/1882010
Teshome, A. (2024a). Mismatch between higher education skill supply and labor market demand: The case of engineering graduates in Ethiopia [Unpublished master’s thesis]. Addis Ababa University. https://doi.org/10.13140/RG.2.2.23456.78901
Teshome, A. (2024b). Skills gap hierarchy in Ethiopian engineering graduates: Employer and instructor perspectives. Ethiopian Journal of STEM Education, 3(1), 112–138. https://doi.org/10.4314/ejsteme.v3i1.6
Teshome, T., & Oumer, A. (2023). Mismatch between engineering graduate competencies and employer expectations in Ethiopia: Evidence from industry surveys. International Journal of Research in Science and Engineering, 6(1), 1–15. https://doi.org/10.33830/ijrse.v6i1.1607
World Bank. (2020). The changing wealth of nations 2020: Building a sustainable future. World Bank Group. https://doi.org/10.1596/978-1-4648-1591-2
World Bank. (2022). Ethiopia economic update: Strengthening export performance through improved competitiveness. World Bank Group. https://doi.org/10.1596/978-1-4648-1892-0
World Bank. (2020). Rwanda skills development report. https://doi.org/10.1596/978-1-4648-1591-2
World Economic Forum. (2023). Future of jobs report 2023. https://doi.org/10.54394/WEF7890
Yamane, T. (1967). Statistics: An introductory analysis (2nd ed.). Harper & Row. https://doi.org/10.1177/001316446702700447