Digital Financial Inclusion, Governance, and GDP per Capita in OIC Economies: An Exploratory Spatial–Mundlak Panel Analysis

Digital financial inclusion (DFI) may enhance economic participation, but its association with income depends on financial usage, institutional conditions, and cross-country heterogeneity. This study examines log GDP per capita in 37 Organisation of Islamic Cooperation (OIC) economies over 2017–2023 (259 country–years). DFI is measured by a six-indicator index using principal component analysis; a spatial–Mundlak panel model combines within–between covariates, economic-similarity weights, year fixed effects, and a country random intercept, estimated by Gaussian maximum likelihood. The within-country DFI coefficient is 0.000845 (model-based p=0.361), and the spatial-lag coefficient is −0.2173 (p=0.072). Country-average governance exhibits a positive conditional coefficient (0.6017, p=0.0319), whereas neither exploratory DFI–governance interaction is statistically significant (joint p=0.294). DFI estimates remain imprecise under alternative spatial weights, a pre-2024 index reference period, and conditional trajectory-bootstrap inference. The findings distinguish persistent institutional and income differences from annual DFI variation, without establishing a causal DFI effect or verified cross-border financial transmission. Serial dependence and incomplete measurement provenance limit the strength of statistical inference.