The Dynamic Impact of Financial Inclusion and ICT Diffusion on Sustainable Economic Development: Evidence from the MENA Region

This study investigates the dynamic relationship between financial inclusion, ICT development, renewable energy, and sustainable economic growth in the MENA region. Recognizing the growing importance of these factors in shaping the trajectory of sustainable economic development. This paper aims to contribute to the existing literature by providing new evidence from the MENA region, on how the interaction between financial inclusion and ICT development can lead to higher economic growth. This Study examines the impact of ICT diffusion and financial inclusion on economic growth by using an economic growth model that incorporates the joint effect of these two factors. The study employs dynamic panel system GMM estimation and focuses on a sample of 15 countries in the MENA region from 2004 to 2021. The findings reveal significant and positive associations between financial inclusion, ICT development, and sustainable growth in the MENA region. The findings reveal that financial inclusion has a positive effect on growth, ICT is expected to enhance growth by improving digital skills and increasing the efficiency of the financial market, particularly in the banking sector. Effective use of ICT, such as branchless banking and mobile banking, can be cost-effective and improve financial accessibility for previously marginalized individuals, thereby fostering financial inclusion. The interaction effects between ICT diffusion and finance are positive, indicating that the combined impact of ICT and financial inclusion can mitigate the negative effects of ICT investments.