ICT, Financial Inclusion, and Growth Evidence from African Countries

By Kangni Kpodar, Mihasonirina Andrianaivo. Social Science Research Network, 2011

394 citations recorded by the source corpus.

This paper studies the impact of information and communication technologies (ICT), especially mobile phone rollout, on economic growth in a sample of African countries from 1988 to 2007. Further, we investigate whether financial inclusion is one of the channels through which mobile phone development influences economic growth. In estimating the impact of ICT on economic growth, we use a wide range of ICT indicators, including mobile and fixed telephone penetration rates and the cost of local calls. We address any endogeneity issues by using the System Generalized Method of Moment (GMM) estimator. Financial inclusion is captured by variables measuring access to financial services, such as the number of deposits or loans per head, compiled by Beck, Demirguc-Kunt, and Martinez Peria (2007) and the Consultative Group to Assist the Poor (CGAP, 2009). The results confirm that ICT, including mobile phone development, contribute significantly to economic growth in African countries. Part of the positive effect of mobile phone penetration on growth comes from greater financial inclusion. At the same time, the development of mobile phones consolidates the impact of financial inclusion on economic growth, especially in countries where mobile financial services take hold.

Subfields: Economics and Econometrics, Information Systems, Management Information Systems

View Paper: https://www.semanticscholar.org/paper/3efc5a8dc4da57866f48395d673f928a965145b3

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Citations in the corpus

Financial inclusion: measurement, spatial effects and influencing factors (2017, background): “With the development of information and communication technologies (ICT), the Internet (and the mobile Internet) plays a key role in the financial system by consolidating the impact of financial inclusion on economic growth (Andrianaivo and Kpodar 2011).”
Mobile Phones, Financial Inclusion, and Growth (2012, methodology): “27 More details can be found in Andrianaivo and Kpodar (2011). 28Given that financial development and financial inclusion are closely related phenomenon, we used the tests of equality of mean and variance of the private credit ratio for the two periods (2003-2007 and 1988-2007) to assess the validit”
Impact of Information and Communication Technology on Economic Growth: Evidence from Developing Countries (2019, methodology): “Following previous studies (Andrianaivo and Kpodar 2011; Sassi and Goaied 2013; Wamboye et al. 2015; Albiman and Sulong 2016; etc.), we examine the nature of the relationship between ICT and economic growth by including ICT proxies, namely, TEL, which is the number of fixed telephone subscriptions…”
ACHIEVING THE SUSTAINABLE DEVELOPMENT GOALS (2016, background): “A recent study by Andrianaivo and Kpodar (2011) suggests that financial inclusion through the use of mobile phone and information and communication technology (ICT) tools also is associated with economic growth, because these channels improve access to financial services in areas where traditional…”
Financial inclusion research around the world: A review (2020, background): “…in many societies (Bold, Porteous, & Rotman, 2012); thirdly, financial inclusion can help in reducing poverty levels to a desired minimum (Chibba, 2009; Neaime & Gaysset, 2018), and lastly, financial inclusion brings other socio-economic benefits (Kpodar & Andrianaivo, 2011; Sarma & Pais, 2011).”
The Impact of Financial Inclusion on Economic Growth, Poverty, Income Inequality, and Financial Stability in Asia (2020, background): “Mihasonirina and Kangni (2011) also found the significance of financial inclusion and communication technology toward economic growth.”