The Relationship between Governance Quality and Financial Stability with Mediator Role of Financial Inclusion

Document Type : Research Paper

Authors

1 Assistant Professor, Department of Economics, Economic Affairs Research Institute, Tehran, Iran

2 Assistant Professor, Department of Economics, Payame Noor University, Tehran, Iran

Abstract

In the present study, the relationship between financial stability, quality of governance and financial inclusion has been investigated in developing countries with upper middle income in the period from 2004 to 2020. The multidimensional indexing method and two-stage GMM have been utilized to achieve this goal. Also, the mediating role of the financial inclusion in the relationship between the governance quality and financial stability has been examined by two methods of estimation and Sobel statistics. The results showed that the financial inclusion and governance quality had a positive and significant effect on the financial stability. The mediating role of the financial inclusion in the relationship between the governance quality and financial stability has been confirmed by Sobel test statistics. Based on these results, it is suggested that the rules and regulations should be reviewed by regulatory institutions in order to increase the financial activities which improve the financial inclusion and maintain the improved financial stability in the long run to reduce the negative effects of multiple regulations on financial inclusion..
JEL Classification: C38, O16, O57
 
 

Keywords

References

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Journal of Economic Research (Tahghighat- E- Eghtesadi)
Volume 56, Issue 4 - Serial Number 137
February 2022
Pages 673-701

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History

  • Receive Date: 17 October 2021
  • Revise Date: 16 January 2022
  • Accept Date: 12 March 2022

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