The effects of financial inclusion on economic growth and stability in the provinces of Iran

Subject Areas : Economic Development, Innovation, Technological Change, and Growth

Tahmoures Elyasi Bakhtiari ¹ , Abbas Memarnezhad ² , Farhad Dejpasand ³ , Farhad Ghaffari ⁴

1 - * PhD Candidate in Economics, Faculty of Management and Economics, Science and Research Branch, Islamic Azad University, Tehran, Iran, [e-mail]
2 - Associate Professor of Economics, Faculty of Management and Economics, Science and Research Branch, Islamic Azad University, Tehran, Iran, (Corresponding Author) [e-mail]
3 - Assistant Professor, School of Economics and Political Science, Shahid Beheshti University
4 - Associate Professor of Economics, Faculty of Management and Economics, Science and Research Branch, Islamic Azad University, Tehran, Iran, [e-mail]

Received: 2024-06-22 Accepted : 2024-10-14 Published : 2024-10-14

Keywords: Financial Inclusion, Growth, Economic Stability, Panel Vector Autoregression Method With Distribution Intervals JEL Classification: G32, G10, F37, F41,

Abstract :

In recent decades, the issue of strengthening the financial inclusion of the public in accessing financial services has become one of the priorities of policy makers and senior managers. The reason for the importance of this issue is that the strengthening of financial inclusion provides access to financing services for all income groups (including the poor), and this can strengthen the economic growth of countries and increase economic prosperity in the medium and long term. Therefore, in this study, the effects of financial inclusion on economic growth and stability in 30 provinces of the country during the period of 2006-2021 have been investigated using the vector autoregression method with distribution breaks, fully modified ordinary least squares and vector error correction. The results of the estimation of economic growth and stability model show that financial inclusion has increased economic stability and economic growth in the long term. It can argue that financial inclusion from both supply and demand channels has increased economic stability, growth, and development of investments. This impact can come from providing favorable financial services, improving and upgrading the financial system.

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