Analyzing the dynamic relationship between financial development, financial inclusion, and institutional quality in developing countries

This paper examines the effect of financial inclusion and institutional quality on financial development in MINT countries from 2004 to 2020. We composed the financial inclusion index using different sub-indicators through principal component analysis. We also included political stability in the model to measure institutional quality. The AMG results suggest that financial inclusion positively impacts financial development in all MINT countries, while political stability is not statistically significant. Additionally, the D-H causality results show a bidirectional causality linkage between financial development and financial inclusion, financial development and economic growth, and unidirectional relationships from financial development to political stability and total population. Overall, these findings highlight the importance of financial inclusion in promoting financial development in MINT countries. © 2025 Elsevier Inc. All rights are reserved, including those for text and data mining, AI training, and similar technologies.