The Effects of Digital Financial Inclusion on Human Development in Developing Countries: Evidence from MM-QR with Fixed Effect

Document Type : Research Paper

Authors

1 Department of Management, Faculty of Business and Management, Universiti Sultan Zainal Abidin, Gong Badak, 21300, Kuala Terengganu, 21300, Malaysia

2 Department of Management, Faculty of Business and Management, Universiti Sultan Zainal Abidin, Gong Badak, 21300, Kuala Terengganu, Malaysia

3 Department of Economics, School of Business and Economics, University Putra Malaysia

10.22059/ijms.2025.374206.676627

Abstract

This study examines the effect of digital financial inclusion on the conditional distribution of human development in 37 developing countries with available data from 2004 to 2021. The study uses the Method of Moment Quantile Regression (MM-QR) with a fixed effect that examines the effect of digital financial inclusion on the different levels of human development. The findings indicate that digital financial inclusion promotes human development, with a more significant impact in countries with very high human development. In addition, the findings indicate that high-quality governance enhances the positive effect of digital financial inclusion on human development. The results of this study were robust when we used the System Generalized Method of the Moment (SGMM) estimator. The study concludes that the effect of digital financial inclusion on human development varies in developing countries, depending on each country's level of human development. Policymakers should focus on policies that will speed up the digitalization process and increase access and coverage of digital financial services, such as mobile money, e-wallets, QR code payments, and blockchain technology, especially in countries with low and medium levels of human development.

Keywords

Main Subjects

References

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Interdisciplinary Journal of Management Studies
Volume 19, Issue 1
January 2026
Pages 41-56

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