Political regimes as gatekeepers: balancing globalization and financial inclusion dynamics in sub-Saharan African countries

Purpose The study aims to investigate the direct effect of globalization on financial inclusion in SSA and examine the role of the political regime between globalization and financial inclusion. Design/methodology/approach The methodology involves the following steps: Compute a financial inclusion index; Disentangle globalization into social, economic, political and overall; Employ the two-Stage-Least Squares (2SLS) with instrumental variables; use of the System Generalized Method of Moments (S-GMM). Findings Globalization through social, economic and overall dimensions increase financial inclusion while political globalization has no significant effect; political regime through Polity2 and Freedom House increases the effect of globalization on financial inclusion. Research limitations/implications Policymakers should develop long-term strategies that transcend political cycles and adapt to the evolving landscape of globalization to ensure effectiveness in achieving inclusive financial systems. Originality/value This paper is the first to analyze the direct effect of globalization on financial inclusion. It also explores the mediating role of the political regime between globalization and financial inclusion.