Are there links between financial inclusion, mobile telephony, and economic growth? Evidence from Indian states

ABSTRACT

We study the interactions between financial inclusion, mobile telephony, and economic growth in Indian States over 1991–2018. We establish whether there is temporal causality between these three variables. Our findings expose a network of short-run and long-run causal relationships between the variables, including long-run unidirectional causality from financial inclusion and economic growth to mobile telephony.

KEYWORDS:

• Financial inclusion
• economic growth
• mobile telephony
• granger causality

JEL CLASSIFICATION:

• O43
• O16
• E44
• E31

Acknowledgments

This research work is part of a research project entitled “Role of Mobile Telephony as a Toll to Financial Inclusion and Economic Growth”; and is supported by the Indian Council of Social Science Research (ICSSR), New Delhi, India.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ It is constructed using principal component analysis; and is a weighted average of all four financial inclusion indicators.

² They include Haryana, Punjab, Rajasthan, Bihar, Jharkhand, Odisha, West Bengal, Chhattisgarh, Madhya Pradesh, Uttar Pradesh, Uttarakhand, Gujarat, Maharashtra, Andhra Pradesh, Karnataka, Kerala, and Tamil Nadu.

³ They include Himachal Pradesh, Jammu and Kashmir, and Assam.

Additional information

Funding

This work was supported by the Indian Council of Social Science Research (ICSSR), New Delhi, India [This research work is part of a research project e].