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Unveiling the Asymmetric Impact of Digital Financial Inclusion on Micro-Enterprise Performance: Evidence from Emerging Economies and the Moderating Role of Institutional Quality

Authors: Akash Verma

Published: 2025-05-02 01:00:49.908

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Abstract

This study investigates the asymmetric impact of digital financial inclusion (DFI) on the performance of micro-enterprises in emerging economies, considering the moderating role of institutional quality. Utilizing a comprehensive dataset encompassing various indicators of DFI and micro-enterprise performance, this research employs a robust econometric approach, including regression analysis and interaction effects, to examine the complex relationships. The findings reveal a nuanced picture, indicating that while increased access to digital financial services generally benefits micro-enterprises, the magnitude of the impact varies significantly depending on the specific DFI dimension and the prevailing institutional environment. Specifically, the study demonstrates that higher institutional quality amplifies the positive effects of DFI on micro-enterprise profitability and growth, while weak institutional frameworks can hinder or even negate these benefits. These results underscore the importance of complementary policies that promote both digital financial inclusion and strong governance to maximize the potential of DFI for fostering economic development in emerging economies. The paper concludes with policy recommendations aimed at strengthening institutional capacity and tailoring DFI initiatives to the specific needs and contexts of micro-enterprises.

Keywords

Digital Financial Inclusion, Micro-Enterprises, Performance, Institutional Quality, Emerging Economies, Asymmetric Effects, Financial Technology, Economic Development, Financial Access, Small Business

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How to Cite

Akash Verma, (2025-05-02 01:00:49.908). Unveiling the Asymmetric Impact of Digital Financial Inclusion on Micro-Enterprise Performance: Evidence from Emerging Economies and the Moderating Role of Institutional Quality. JANOLI International Journal of Economics and Management Science , Volume MejgkunYNoDF1a6qqjpe, Issue 2.

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