Energy efficiency, financial inclusion, and socio-economic outcomes: Evidence across advanced, emerging, and developing countries

This study analyzes the effects of financial inclusion and energy efficiency on socio-economic performance across advanced, emerging, and developing economies. We view financial inclusion from the lens of access to and usage of financial services, while energy intensity represents energy efficiency. The panel quantile regression model is employed to capture the nonlinear impacts of financial inclusion and energy efficiency across the conditional distributions of the socio-economic indicators. We find that financial inclusion broadly improves the socioeconomic markers, except employment in developing economies. Comparatively, the effect of access to financial services is stronger than the effect of the usage of financial services. On the other hand, the impact of energy efficiency is quite heterogeneous across the country groups and the socio-economic indicators, being sensitive to the level of economic development of the countries. Overall, energy efficiency has the strongest influence in advanced economies, but a moderate influence in the emerging and developing economies. Our results provide imperative policy reflections for the policymakers in the underlying countries, particularly on properly channeling financial resources and enhancing energy efficiency to benefit the various components of their economies.