The Effect of Economic Digitization on Financial Inclusion and International Trade in Southeast Asia

Abstract

The rapid development of information technology has made economic digitization a necessity throughout the world, including Southeast Asia. This study aims to analyze the effect of economic digitization on financial inclusion and international trade using the Vector Autoregression Model analysis tool for ten countries in ASEAN for the 2017-2019 period. The results showed that international trade and financial inclusion variables could respond quickly to shocks in the variable of economic digitization. Economic growth can respond quickly to shocks in global trade variables and financial inclusion variables. There is no causal relationship between economic growth and international trade. However, there is a one-way causality relationship between economic growth and financial inclusion, where inclusion affects economic growth but not vice versa.