Heterogeneous effect of financial inclusion on economic complexity in developing countries

This paper investigates the heterogeneous effect of financial inclusion on economic complexity in developing countries. The empirical analysis relies on quantile via moments method, using data from 71 developing countries over the period 2011-2021. The results show that financial inclusion significantly increases economic complexity, with a stronger effect in countries with high level of economic complexity. These findings imply that the ability of developing countries to produce diversified and increasingly complex products depends on their level of financial inclusion. Therefore, policymakers in developing countries should promote financial inclusion to increase their economic complexity.