Measuring the Relationship between Financial Inclusion and Environmental Dimension in Iraq for the period (2010-2019) By Using the ARDL Model

Abstract

This research aims to measure and analyze the impact of financial inclusion on sustainable environmental development in Iraq, as the research methodology has based on the applied theories and studies which have been addressed and supported by quantitative analysis through using the simple linear regression methodology for periods of time represented by the quarterly data contained in the research for (2010- 2019). Also, the research has used modern methods of standard analysis in studying the relationship between the economic variables in question, as well as identifying the characteristics of these time chains. In order to formulate a quantitative diagnosis of specific factors (independent illustrative variables) for financial inclusion and variables adopted for sustainable environmental development (in Iraq), the research methodology has relied on the use of (ARDL) methodology and has adopted quarterly data as a result of the recent adoption of the financial inclusion program in Iraq. Stability tests and Co integration test for the border approach have been applied by using (Long Run Form and Bounds Test) and (Length Optimal Lag). According to the standards of (SBC-Schwarz Bayesian Criteria) and (AIC - The Akaike Information Criterion), (ARDL) eliminates problems related to self-association and therefore gives efficient and impartial results, also the Error Correction Model (ECM) gives the speed of adjusting the balance in the short term. The results of Iraq's model showed opposition to the hypothesis of a direct relationship to financial inclusion in environmental development as a result of the impact of the wars and internal shocks suffered by the economy during the research period. The results of the model have indicated that there is a direct relationship between independent variables and the environmental factor in the short and long term and there is the possibility of modifying and achieving balance within two and a half seasons, i.e., for a very short period. The results support the success of financial inclusion in Iraq for the coming years as a future vision to achieve this through the settlement of salaries and the development of accelerated technology. Rather, the research has found a positive relationship between the explanatory variables (illustrative) and the rate of arable land where the long-term flexibility reached ((0.03)) so this corresponds the logic of economic theory. The determinant coefficient equal to (0.99), which explains 99% of the changes resulting in the environmental development index, is explained by the variables of financial inclusion, while the remaining 1% is explained by other variables that are not included in the standard model and included in random variable. In addition, the signal of the slowing dependent variable is negative, which means that there is a significance relationship, so the short-to[1]long-term adjustment speed is 1.03 percent.