Mobile Phones, Financial Inclusion, and Growth | Zendy

Mihasonirina Andrianaivo | Zendy; Kangni Kpodar | Zendy

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Mobile Phones, Financial Inclusion, and Growth

Author(s) -

Mihasonirina Andrianaivo,

Kangni Kpodar

Publication year - 2012

Publication title -

review of economics and institutions

Language(s) - English

Resource type - Journals

ISSN - 2038-1379

DOI - 10.5202/rei.v3i2.75

Subject(s) - mobile phone , financial inclusion , endogeneity , mobile payment , business , phone , mobile telephony , developing country , economics , financial services , computer science , finance , econometrics , telecommunications , economic growth , mobile radio , linguistics , philosophy , payment

This paper assesses the impact of mobile phone rollout on economic growth in a sample of African countries from 1988 to 2007. Further, in light of the large financial infrastructure gap in African countries, we investigate whether mobile phone development fosters economic growth through better financial inclusion. In estimating the impact of mobile phone development on growth, we use mobile penetration rate as well as the cost of mobile local calls to capture mobile phone diffusion, while financial inclusion is measured by the number of deposits or loans per head. Using the System Generalized Method of Moments (GMM) estimator to address endogeneity issues, the results confirm that mobile phone development contributes significantly to economic growth in African countries. Part of the positive effect of mobile phone penetration on growth comes from greater financial inclusion.

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