Spatial Determinants of Financial Inclusion over Time

This paper investigates the factors generating changes in the financial inclusion levels based on data from 120 countries for 2011 and 2014. After calculating the index of financial inclusion across countries, we find evidences on the presence of spatial dependencies by using the Global Moran's I and local indicators of spatial association analyses. Then, we employ spatial regression and spatial panel data models that control for spatial interdependence. The results show that social, banking and political factors play an important role in the determination of change in financial inclusion. We also find financial inclusion convergence among the countries.