Do Financial Inclusion, Human Capital and Gross Fixed Capital Formation Affect Economic Growth? An Evidence from Selected Developing Economies

Abstract

Financial inclusion is generally considered a key driver of economic growth as it brings persons, families, and firms within the financial structure which activates consumption and expenses, particularly in the developing nations of the world. This research investigates the impact of financial inclusion with other major variables on the economic growth of selected developing nations. For the analysis, we have taken data from 2011 to 2020 from the concerned developing nations. By using a random effect technique, results show that financial inclusion, human capital, and urbanization tend to increase the economic growth of developing countries. Moreover, gross fixed capital formation also affects economic growth positively. The study results suggest that focus should be made on the provision of financial services to all segments of the community. Furthermore, there is a need for more educational facilities for having more economic growth. Finally, the Government should emphasize on more stable environment for more investment and industrialization in developing economies.