Browsing by Author "Gonçalves, Matilde Cantarino da Silva de Baptista"
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- Is financial inclusion good for bank profitability? : evidence for the 2011-2015 periodPublication . Gonçalves, Matilde Cantarino da Silva de Baptista; Bhimjee, Diptes Chandrakante PrabhudasThe present Dissertation’s academic research question addresses the impact of financial inclusion on bank profitability for the 2011 to 2015 period, using a sample comprised of 67 countries worldwide. In order to address this research question, this document employs a two-step approach. It first uses Principal Component Analysis to create an index of financial inclusion. Second, employs a panel data regression in order to examine the effect that the proposed index has on bank profitability. Finally, it employs a robustness check by splitting the sample into three different categories: i) per capita income; ii) regions; and iii) population size. The overall findings suggest that financial inclusion is growing throughout the addressed time period and, more importantly, it has a positive and significant impact on bank profitability. Data regarding financial inclusion were extracted from The World Bank’s “Global Payment Systems Survey - accounts and access” data module (2016), the F.R.E.D.’s database, and The World Bank group’s “Financial Structure and Development” dataset. Data regarding the macroeconomic and bank-specific variables were extracted from World Development Indicators-The World Bank Group, the F.R.E.D.’s database, the World Bank national accounts data, OECD National Accounts data, United Nations Population Division, Eurostat, The Worldwide Governance Indicators, UNESCO Institute for Statistics, and Financial Structure and Development-The World Bank Group. Our findings suggest that the importance of guaranteeing an inclusive financial system should not only be a development goal but also a priority for banks, in view of the fact that this trend is good for banking profitability.