Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/168460
Authors: 
Grohmann, Antonia
Klühs, Theres
Menkhoff, Lukas
Year of Publication: 
2017
Series/Report no.: 
DIW Discussion Papers 1682
Abstract: 
While financial inclusion is typically addressed by improving the financial infrastructure we show that financial literacy, representing the demand-side of financial markets, also has a beneficial effect. We study this effect at the cross-country level, which allows to consider institutional variation. Regarding "access to finance", financial infrastructure and financial literacy are mainly substitutes. However, regarding the "use of financial services", the effect of higher financial literacy strengthens the effect of more financial depth. The causal interpretation of these results is supported by IV-regressions. Moreover, the positive impact of financial literacy holds across income levels and several subgroups within countries.
Subjects: 
financial inclusion
financial literacy
financial institutions
financial development
JEL: 
O1
G2
D14
Document Type: 
Working Paper

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