DefinePK

Abstract

This study investigates the role of sustainable FinTech and governance in promoting financial inclusion across countries using advanced dynamic panel data econometric techniques. Drawing on data from reputable international sources such as the World Development Indicators (WDI), World Governance Indicators (WGI), and the IMF Financial Access Survey (FAS), the analysis covers a panel of countries over a 20–25 year period. Key variables include a Financial Inclusion Index (constructed via Principal Component Analysis of bank branches per capita, ATM density, and account usage), a Governance Index (based on control of corruption, rule of law, and regulatory quality), financial development (measured by domestic credit to the private sector as a percentage of GDP), and GDP per capita as a control variable.
The methodology includes descriptive analysis, stationarity tests, panel cointegration tests, and the estimation of error correction models. Dynamic panel estimation techniques such as the Mean Group (MG), Pooled Mean Group (PMG), and Dynamic Fixed Effects (DFE) models were employed to assess both long-run and short-run relationships. The results provide evidence of significant long-run linkages among governance, financial development, and financial inclusion, highlighting the importance of institutional quality and financial infrastructure in expanding access to financial services. The findings offer valuable insights for policymakers seeking to foster inclusive financial systems through sustainable FinTech solutions and governance reforms.