The Nexus Between Financial Inclusion and Economic Growth in ASEAN

I Made Suidarma


Inclusive growth has recently become an interesting issue to be studied more deeply, especially in the financial sector as outlined in the concept of financial inclusion. The role of the financial sector is important considering this sector is the primary sector in encouraging economic activity especially in the real sector. This study aims to analyze the influence and long-term relationship of financial inclusion through the instrument of the number of Automatic Teller Machine (ATM)s and commercial bank branches on ASEAN economic growth through Gross Domestic Product (GDP). The data used is secondary data in the form of an annual panel consisting of ASEAN countries with the period of 2008-2015 for the purpose of seeing the impact after the global crisis that occurred. The method used Panel Vector Error Correction Model (VECM) to see the long-term relationship and the GDP response when shocks occur in the variable financial inclusion. The result of estimation shows that financial inclusion through the number of ATMs and the number of branches of commercial banks were able to contribute positively to economic growth in ASEAN.


Financial Inclusion; Economic Growth; the Nexus

Full Text:



Abu Bader, Suleiman and Abu Qarn, Ameer S. 2007. Financial Development and Economic Growth: The Egyptian Experience. Journal of Policy Modeling 30 (2008) 887–898

Asian Development Bank Institute. 2014. Financial Inclussion in Asia Country's Surveys.

Ayyagari, Meghana and Beck, Thorsten. 2015. Financial Inclusion in Asia: An Overview. Asian Development Bank.

Boukhatem, J. 2015. Assessing the direct effect of financial development on poverty reduction in a panel of low-and middle-income countries', Research in International Business and Finance.

Gujarati, Damodar, and Porter. 2009. Basic Econometric. Fourth Edition. The Mc Graw-Hill Companies.

Hannig, A. 2010. Asian Development Bank Institute.

Julie, Oruo. 2013. The Relationship Between Financial Inclusion and GDP Growth in Kenya. Research Project Submitted in Partial Fulfillment of The Requirements For The Award of The Degree of Master of Business Administration of The University of Nairobi.

Kunt , Asli Demirguc, Klapper , Leora dan Singer Dorothe. 2017. Financial Inclusion and Inclusive Growth A Review of Recent Empirical Evidence. ADB Policy Research Working Paper

Maysami, Ramin Cooper and Koh, Tiong Sim. 1998. A Vector Error Correction Model Of The Singapore Stock Market. International Review of Economics and Finance

Mwaitete, Cairo Paul and George, Ley Albert. 2018. Financial Inclusion and Economic Growth A Regression Analysis. Imperial Journal of Interdisciplinary Research (IJIR) Peer Reviewed – International Journal Vol-4, Issue-1, 2018 (IJIR) ISSN: 2454-1362,

Nancy Ong-A-Kwie-Jurgens. 2016. Identifying Constraints to Financial Inclusion and their impact on GDP and Inequality: A case of Suriname. Centrale Bank Van Suriname.

Oji, Chijiyo Kennedy. 2015. Promoting Financial Inclusion for Inclusive Growth in Africa. Economic Diplomary Programme.

Okoye , Lawrence Uchenna. 2017. Financial Inclusion as a Strategy for Enhanced Economic Growth and Development. Journal of Internet Banking and Commerce.

Pesaran, Shin dan Smith. 2000. Structural Analysis of Vector Error Correction Press, New York.

Rosadi, Dedi. 2012. Ekonometrika dan Analisis Runtun Waktu Terapan dengan Eviews. Yogyakarta: Penerbit Andi.

Saab, Gretta. 2017. Financial Inclusion and Growth. The Business and Management Review, Volume 8 Number 4

Surjaningsih, Utari and Trisnanto. 2012. Dampak Kebijakan Fiskal terhadap Output dan Inflasi. Buletin Ekonomi Moneter dan Perbankan

Widarjono, Agus. 2005. Ekonometrika Pengantar dan Aplikasinya. Yogyakarta; Ekonosia.

Yin Kuo, Chen. 2016. Does The Vector Error Correction Model Perform Better Than Others In Forecasting Stock Price? An Application Of Residual Income Valuation Theory. Economic Modelling 52 (2016) 772–789



  • There are currently no refbacks.

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.