Artificial Intelligence Readiness and Financial Inclusion as Drivers of Economic Growth in Emerging Economies: Evidence from India, Kenya, Brazil, Indonesia and South Africa

Abstract

This study investigates the relationships among artificial intelligence (AI) readiness, financial inclusion, and economic growth in five emerging economies, namely India, Kenya, Brazil, Indonesia, and South Africa, over the period 2017–2024. Using a balanced panel dataset consisting of 40 observations, the study employs pooled ordinary least squares and fixed-effects estimators to examine both the direct effect of AI readiness on economic growth and its indirect effect through financial inclusion.

         The empirical findings indicate that financial inclusion and investment positively and significantly contribute to economic growth. Conversely, no statistically significant evidence is found regarding the direct effect of AI readiness on economic growth or its indirect effect through financial inclusion. These results suggest that the economic benefits of artificial intelligence may require stronger institutional capacities, more advanced digital infrastructures, and higher levels of human capital before becoming visible at the macroeconomic level.

         The study contributes to the growing literature on artificial intelligence and development economics by providing new evidence from emerging economies and highlighting the continuing importance of financial inclusion and productive investment in the digital era.