Financial efficiency and financial inclusion in the host economy and their effects on foreign cash flows: An Application of ARDL, NARDL and panel causality test

Abstract

Introduction: this report contains the mean impact and importance of the financial inclusion, financial efficiency and foreign cash flows. The key fragments role to ascription of the report is to understand the mean value impact of financial inclusion over cross border cash flows, to understand the impact of financial efficiency over the cross border cash flows. How these element of any country can affect the financial channel with these corresponding channel how cross border cash flows are reacting. As with so many test report is clearly indicating the financial inclusion impact and financial efficiency draft over cross border cash flows. In terms to examine the entire report and to find out the questionable marks we tried to use dynamic panel system GMM method and to determine the results we operate the various testing method, time series analysis, system ARDL and various analysis statistic with the related variable that can makes effect on financial inclusion and financial efficiency in order to make impact in foreign cash flow. Various statistical analysis and significant values were the model function in terms to identify the impact and changes in the related subject area. With so many testing variables the counter results of the entire report and other research testing results show the financial inclusion is key model fragments to change any countries value in economy. Any countries with significant financial inclusion service are producing most financial service and their financial efficiency is at higher level. We have seen the financial efficiency means the more use of all financial activity in regular countries works. If any country is using more efficient financial activity then the country is actually practicing more efferent form of financial efficiency, and if they are well enough to product financial efficiency in their country that means the country is generating financial inclusion over their nation as we have seen in various testing approach the significant number with financial inclusion activity the number of the cross border cash flows is high when the country is practicing the financial inclusion in good manner. To determine the financial inclusion level we have tested many variables that are vastly related with financial inclusion and can make effect in financial efficiency level. The efficiency can prove that a nation’s financial work output in order to pressing the input variables. The ratio number of output exceeds then input variable when the financial efficiency is higher and those country with higher efficiency financial level are the country or they are in the category that are making more predictable financial inclusion because with higher efficiency rate any country can focus their level of financial inclusion. With financial inclusion at high level the foreign country will more interest in invest and the transactional capacity will be exceed. That will be leading the cross border cash flows on a different level. The entire report is based on the level of financial inclusion and efficiency level and the affect of these variables in cross border cash flow. The report helps me to understand the financial inclusion term with financial efficiency in terms of cross border cash flows level. Various testing approach and emerging the results from these test was helpful to make this report more reliable in terms to understand the mean importance or impact of the financial inclusion, efficiency and foreign cash flows.