Examining the linkage between innovation and financial inclusion in G20 countries

The aim of this study is to analyze the impact of innovations on financial inclusion in G20 countries for the period 2004-2022. In this context, an index consisting of different indicators is created as an indicator of financial inclusion and the impact of innovations in G20 countries is analyzed. Financial inclusion, which constitutes the dependent variable in the study, is expressed by the financial inclusion index, while innovations, which constitute the independent variable, are represented by the number of patents. Inflation, population growth, number of internet users and economic complexity are added to the research model as control variables. The model created to determine the factors affecting financial inclusion was analyzed with the fixed effects model and estimated with the least squares method. The analysis reveals that innovations increase financial inclusion. Other findings show that the effect of inflation on financial inclusion is negative. Moreover, increases in economic complexity, population growth rate and the number of internet users are found to be effective policy instruments in increasing financial inclusion in G20 countries. Considering the positive effects of innovations on financial inclusion indicators, it is recommended that policies should be implemented to increase the number of patents in G20 countries, as well as to improve knowledge-based productivity capacity and reduce inflation.