Growth of the manufacturing sector, financial inclusion and the moderating role of financial development in Ghana

Purpose This paper aims to use Ghana as a case study to examine the effect of financial inclusion on the growth of the manufacturing sector while considering the moderating role of financial development. Design/methodology/approach The study covers the period from 1960 to 2020 and uses the autoregressive distributed lag model and the fully modified ordinary least square as estimation strategies. The study uses three main indicators of financial inclusion, including financial knowledge, usage of financial services and financial availability. Findings The study reveals that all three indicators of financial inclusion significantly and positively influence growth in the manufacturing sector, with the usage of financial services exerting the strongest impact. Notably, the combined influence of financial inclusion and financial development surpasses their individual effects, suggesting a synergistic relationship. These results underscore the importance for policymakers to pursue a dual strategy, advancing both financial inclusion and financial development to effectively stimulate manufacturing sector performance. Originality/value The impact of financial inclusion on the growth of the manufacturing sector at the macro level is examined. The study also unveils the moderating effect of financial development.