Determining The Long-Term Relationship Between Financial Inclusion and Economic Growth in Algeria for the Period 2004–2019: An Empirical Study Using the ARDL Approach

Abstract

This study aimed to determine the long-term relationship between financial inclusion and economic growth in Algeria over the period 2004–2019. Financial inclusion was measured using two indicators: the first is the banking outreach indicator (number of commercial bank branches per 100,000 adults), and the second is the financial services indicator (number of borrowers from commercial banks per 1,000 adults). Economic growth was measured by the Gross Domestic Product (GDP) at constant US dollar prices. Using a set of econometric approaches and tools and relying on the Autoregressive Distributed Lag (ARDL) methodology, the study found a long-run equilibrium relationship between financial inclusion and economic growth. It is also concluded that changes in the number of bank branches and the number of borrowers are accompanied by changes in economic growth in the same direction.