To Z-score, taken from the Global Financial

To test the relationship between financial inclusion
and stability, Sahay et al. (2015) used panel regression with country fixed
effects for the timeframe from 2004 to 2011. Dependent variables were bank
Z-score, taken from the Global Financial Development database. Financial
inclusion variables from IMF’s Financial Access Survey (ATMs per 100,000
adults, ATMs per 1,000km2, commercial bank branches per 100,000 adults,
commercial bank branches per 1,000km2, registered mobile money accounts per
1,000 adults, deposit accounts with commercial banks per 1,000 adults,
depositors with commercial banks per 1,000 adults, household depistors with
commercial banks per 1,000 adults, household deposit accounts with commercial
bank per 1,000 adults, loan accounts with commercial banks per 1,000 adults,
household loan accounts with commercial banks per 1,000 adults, borrowers from
commercial banks per 1,000 adults). The

variables were lagged by one year in the regression.
The explanatory variables were also interacted with the variable BCP, which
approximates the quality of bank supervision by measuring the degree of
compliance with Basel Core Principles (BCP). Two measures of BCP were tested: a
composite of all the principles, and a subset of BCP principles relevant to
financial inclusion (Core Principles 1, 3, 4, 5, 8, 9, 10, 11, 14, 15, 16, 17,
18, 24, 25, and 29). Control variables were the lagged values of the Financial
Institutions Depth index (FID) from Sahay and others (2015a), real GDP per
capita, excess of credit growth above nominal GDP; contemporaneous variables of
population, FDI-to-GDP ratio, trade-to-GDP ratio, inflation, government
balance, a dummy for banking crisis, and the Lerner index. The coefficient on
the variable “number of borrowers per 1,000 adults” was found to be negative
and significant for both X and X2. The coefficient of the
interaction with both measures of BCP was positive. For other variables of
financial inclusion, the relationships were found to be insignificant or
inconclusive.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now
Go Top
x

Hi!
I'm Rita!

Would you like to get a custom essay? How about receiving a customized one?

Check it out