# **Table 5**

# **Pairwise Pearson correlation coefficients between overall financial inclusion and stability conditioning on individual country characteristics**

The Pearson correlation between overall financial inclusion and financial stability conditional on country characteristics. The sample is split in two using the median value of the conditioning variable. The column “tot obs” reports the total number of observations. The column “ρ (low)” shows the Pearson correlation coefficient for inclusion and stability using information on the countries with a value below the median of the conditioning variable. The column “ρ (high)” is the Pearson correlation coefficient for inclusion and stability using information on the countries with a value above the median of the conditioning variable. The column “p-value” reports the p-value of a two-tailed test where the Null hypothesis is that both samples of pairs show the same correlation strength, i.e., ρ(low) = ρ(high). We compute the correlations coefficients between financial stability and overall financial inclusion (columns under the heading Overall), financial inclusion for firms (columns under the heading Firms), and financial inclusion for individuals (columns under the heading Individuals). Annex 3 presents a description of the conditioning variables.

|||**O**|**verall**|||**Firms**|||**Individual**|**s**|
|---|---|---|---|---|---|---|---|---|---|---|
|Conditioning variable|Tot obs|ρ (low)|ρ (high)|p-value|ρ (low)|ρ (high)|p-value|ρ (low)|ρ (high)|p-value|
|GDP per capita growth (annual %)|157|-0.395|-0.252|0.323|0.017|-0.115|0.419|-0.498|<br>-0.268|0.100|
|Population density (people per sq. km of land area)|157|-0.401|-0.358|0.756|-0.114|0.045|0.326|-0.458|<br>-0.456|0.990|
|Asset share of foreign controlled banks|124|-0.378|-0.395|0.917|0.156|-0.103|0.157|-0.458|<br>-0.450|0.956|
|Asset share of government controlled banks|111|-0.338|-0.472|0.410|0.266|0.016|0.191|-0.490|<br>-0.585|0.502|
|Domestic credit to private sector (% of GDP)|152|-0.264|-0.144|0.451|-0.130|0.185|**0.055**|-0.289|<br>-0.289|0.997|
|Through the cycle outstanding loan annual growth|154|-0.334|-0.142|0.215|0.092|-0.144|0.149|-0.480|<br>-0.085|**0.008**|
|Barro-Lee: Average years of total schooling, age 25+, total|132|-0.217|-0.238|0.901|-0.159|0.168|**0.064**|-0.163|<br>-0.335|0.304|
|School enrollment, secondary (% gross)|146|-0.092|-0.173|0.623|-0.191|0.221|**0.014**|0.024|<br>-0.338|**0.029**|
|Age dependency ratio (% of working-age population)|157|-0.177|-0.398|0.137|0.148|-0.137|**0.078**|-0.287|<br>-0.443|0.272|
|Mobile cellular subscriptions (per 100 people)|156|-0.197|-0.229|0.836|-0.214|0.212|**0.008**|-0.148|<br>-0.372|0.143|
|Percent of firms competing against unregistered or informal firms|116|-0.394|-0.174|0.207|-0.075|-0.117|0.822|-0.466|<br>-0.207|0.128|
|Percent of firms formally registered when they started operations in the country|116|-0.141|-0.380|0.175|-0.159|0.092|0.184|-0.060|<br>-0.515|**0.009**|
|**Number of years firm operated without formal registration**|116|-0.494|-0.089|**0.018**|0.025|-0.070|0.621|-0.620|<br>-0.058|**0.001**|
|Percent of firms identifying practices of competitors in the informal sector as a major constraint|<br>117|-0.286|-0.162|0.493|-0.083|0.000|0.660|-0.482|<br>-0.267|0.193|
|Proportion of private domestic ownership in a firm (%)|118|-0.391|-0.124|0.128|-0.116|0.042|0.403|-0.577|<br>-0.239|**0.031**|
|Proportion of private foreign ownership in a firm (%)|118|-0.132|-0.407|0.113|0.015|-0.090|0.576|-0.226|<br>-0.609|**0.013**|
|Proportion of government/state ownership in a firm (%)|118|-0.404|-0.220|0.279|-0.087|-0.015|0.702|-0.561|<br>-0.384|0.232|
|Percent of firms not needing a loan|116|-0.196|-0.311|0.516|-0.073|-0.072|0.996|-0.275|<br>-0.466|0.253|
|Percent of firms whose recent loan application was rejected|69|-0.536|-0.370|0.405|-0.200|-0.115|0.731|-0.555|<br>-0.443|0.553|
|**Chinn and Ito Financial Openness Index**|150|-0.118|-0.414|**0.053**|-0.086|0.053|0.402|-0.144|<br>-0.484|**0.024**|
|Quality of supervision|117|-0.392|-0.375|0.918|0.224|0.019|0.278|-0.524|<br>-0.447|0.604|

26