Does financial literacy improve financial inclusion? Cross country evidence
By Antonia Grohmann, Theres Klühs, Lukas Menkhoff. World Development, 2018
613 citations recorded by the source corpus.
While financial inclusion is typically addressed by improving the financial infrastructure we show that financial literacy, representing the demand-side of financial markets, also has a beneficial effect. We study this effect at the cross-country level, which allows to consider institutional variation. Regarding “access to finance”, financial infrastructure and financial literacy are mainly substitutes. However, regarding the “use of financial services”, the effect of higher financial literacy strengthens the effect of more financial depth. The causal interpretation of these results is supported by IV-regressions. Moreover, the positive impact of financial literacy holds across income levels and several subgroups within countries.
Subfields: Accounting, Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/ec0bab0e53089afcd88917ec1c4b5433194ec181
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Citations in the corpus
- Financial literacy: A systematic review and bibliometric analysis (2020, positive): “The basic financial literacy level is similar across developed and developing nations, but the understanding of advanced concepts is lower in Asian middle-class economies (Grohmann et al., 2018).”
- Building financial resilience through financial and digital literacy in South Asia and Sub-Saharan Africa (2020, neutral): “…has argued that numeracy and language skills have a direct impact on respondents’ financial and digital competencies, while only indirectly influencing their financial decisions via their impact on financial and digital literacy (e.g., Grohmann, Klühs, & Menkhoff, 2018; Morgan & Trinh, 2019a).”