Analysing the Impact of Financial Development on Poverty Reduction: The Roles of Employment and Digitalization in Emerging Economies
DOI:
https://doi.org/10.62843/jssr.v6i3.738Keywords:
Financial Development, Poverty, Employment, Digitalization, Emerging EconomiesAbstract
Abstract: The effectiveness of financial development in reducing poverty may depend on labour market results and the uniformity of digital transformation; that is why financial development is generally distinguished as a driving force of economic growth. Grounded in the Financial Intermediation Theory, the purpose of this study is to examine the impact of financial development on poverty reduction by using employment as a mediator and digitalization as a moderator in digitally transforming emerging economies, over the period 2006–2025. This study applies panel regression techniques, mediation analysis, and moderation analysis to investigate the relationships among the variables and uses data from the World Bank’s indicators. The outcomes of this study show that there exists a relationship between financial development and poverty through the mediating effect of employment, both directly or indirectly, whereas digitalization also intensifies this relationship by increasing economic prospects and financial growth. The results analysis contributes to the existing body of knowledge by putting forward a consolidated and unified mediation–moderation foundation that gives novel ideas and different viewpoints into the Finance-growth-poverty trilogy and proposes policy implications and governance challenges for fostering and advancing unbiased economic sustainability in developing economies.
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