HETEROGENEOUS EFFECT OF FINANCIAL INCLUSION ON ECONOMIC COMPLEXITY IN DEVELOPING COUNTRIES

Authors:

Fousséni RAMDE, Ibrahim OUEDRAOGO, Porto BAZIE

Keywords:

Developing countries, heterogeneous effect, financial inclusion, economic complexity

Abstract:

This paper investigates the heterogeneous effect of financial inclusion on economic complexity in developing countries. The empirical analysis relies on quantile via moments method, using data from 71 developing countries over the period 2011-2021. The results show that financial inclusion significantly increases economic complexity. Moreover, the positive effect of financial inclusion on economic complexity is higher in countries with high level of economic complexity and lower in countries with low level of economic complexity. These findings imply that the ability of developing countries to produce diversified and increasingly complex products depends on their level of financial inclusion. Therefore, financial inclusion promotion should be taken into account in the implementation and the formulation of policies in order to facilitate structural transformation process in developing countries.

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