Does women’s financial inclusion reduce corruption? role of socioeconomic and institutional factors

• Constructs a global novel Women’s Financial Inclusion (WFI) Index integrating traditional and digital finance. • Finds a U-shaped link: early inclusion may weaken, but deeper inclusion strengthens corruption control. • Identifies actionable thresholds, with digital finance delivering earlier governance gains. • Female education, labor force participation, and institutional quality amplify the governance impact of WFI. • Emphasizes policy sequencing: inclusion must align with regulation and empowerment reforms. Financial inclusion is widely promoted as a pathway to transparency and development, yet its gender-specific governance effects remain underexplored. This study examines the impact of women’s financial inclusion (WFI) on corruption control across 150 countries from 2011 to 2023, using a dynamic System-GMM framework to address endogeneity and persistence. We construct a composite Women’s Financial Inclusion Index (WFII) integrating traditional and digital access indicators and assess robustness using alternative measures. Results reveal a statistically significant U-shaped relationship. At low levels, greater WFI is associated with weaker corruption control; beyond a critical threshold of approximately 1.86 (standardized units), deeper inclusion strengthens governance. A complementary Women’s Digital Financial Inclusion Index (WDFII) exhibits a lower turning point, indicating that digital inclusion generates earlier governance gains. The governance-enhancing impact of WFI is amplified by female education, labor force participation, and stronger institutional quality. Income heterogeneity further shows that lower-income countries experience earlier marginal benefits, whereas upper-middle- and high-income countries require deeper inclusion before governance improvements materialize. Overall, WFI acts as an institutional amplifier, strengthening accountability where supportive legal and socioeconomic conditions are present. Its anti-corruption benefits depend on complementary investments in female human capital, regulatory safeguards, and institutional strength. Effective policy must therefore align financial access expansion, particularly through digital channels, with broader empowerment and governance reforms to ensure inclusion translates into sustained corruption control and inclusive development.