Explaining Financial Inclusion in the European Union: A Panel Data Analysis of Macroeconomic Determinants (2004–2023)
Journal
Journal of Risk and Financial Management
Date Issued
2026-06-26
Author(s)
Benítez-Gaibor, Marcela Karina
Barreno-Córdova, Carlos
Córdova-Pacheco, Ana
Lema-Chicaiza, Micaela
Type
Article
Abstract
This study examines the relationship between financial inclusion and economic development in the European Union by analyzing its macroeconomic determinants across 26 countries over the period of 2004–2023. Using a balanced panel dataset, the empirical analysis employs econometric techniques that account for heterogeneity, autocorrelation, and cross-sectional dependence, leading to the estimation of a Panel-Corrected Standard Errors (PCSE) model. Financial inclusion is proxied by the number of automated teller machines per 100,000 adults, while the explanatory variables include GDP per capita, personal remittances, inflation, years of schooling, unemployment, and foreign direct investment. The results show that GDP per capita, remittances, inflation, and unemployment have a positive and statistically significant effect on financial inclusion, whereas education and foreign direct investment exhibit a negative and significant relationship. These findings suggest that financial inclusion in the European Union is shaped by a complex interplay of economic development, labor market conditions, and external financial flows, rather than by structural factors alone. Notably, the results reveal counterintuitive relationships that challenge conventional assumptions about the roles of education and foreign investment in promoting financial access. This study contributes to the literature by providing updated panel evidence for advanced economies and by emphasizing the multidimensional nature of financial inclusion in a context of increasing digitalization and economic integration. The findings also offer relevant policy implications, suggesting that strategies to enhance financial inclusion should go beyond expanding financial infrastructure and instead focus on improving the effective use of financial services, strengthening financial capabilities, and reducing structural disparities across countries. © 2026 by the authors.