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Innovations in emerging markets: the case of mobile money

Author

Listed:
  • Adeline Pelletier
  • Susanna Khavul
  • Saul Estrin

Abstract

Mobile money is a financial innovation that provides transfers, payments, and other financial services at a low or zero cost to individuals in developing countries where banking and capital markets are deficient and financial inclusion is low. We use transaction costs and institutional theories to explain the growth and impact of mobile money. Having developed a new archival dataset that tracks mobile money deployment across 90 emerging economies during 16 years between 2000 and 2015, we address the question of relative economic impact of the banking and telecoms sectors in the provision of mobile money. We show that telecom groups and not banks are more likely to launch mobile money in countries where legal rights are weaker and credit information less prevalent. However, it is when mobile money is offered via a banking channel that the spillover effects on the economy are greater. Findings have significant implications for policy and strategy.

Suggested Citation

  • Adeline Pelletier & Susanna Khavul & Saul Estrin, 2020. "Innovations in emerging markets: the case of mobile money," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 29(2), pages 395-421.
    • Handle: RePEc:oup:indcch:v:29:y:2020:i:2:p:395-421.
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    File URL: http://hdl.handle.net/10.1093/icc/dtz049
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    Citations

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    Cited by:

    1. Qiu, Christina M., 2022. "Regionalized liquidity: A cross-country analysis of mobile money deployment and inflation in developing economies," World Development, Elsevier, vol. 152(C).
    2. Shaikh, Aijaz A. & Glavee-Geo, Richard & Karjaluoto, Heikki & Hinson, Robert Ebo, 2023. "Mobile money as a driver of digital financial inclusion," Technological Forecasting and Social Change, Elsevier, vol. 186(PB).
    3. Robertson Khan Tengeh & Frank Sylvio Gahapa Talom, 2020. "Mobile Money as a Sustainable Alternative for SMEs in Less Developed Financial Markets," JOItmC, MDPI, vol. 6(4), pages 1-21, November.
    4. Apeti, Ablam Estel, 2023. "Household welfare in the digital age: Assessing the effect of mobile money on household consumption volatility in developing countries," World Development, Elsevier, vol. 161(C).
    5. Godsway Korku Tetteh, 2023. "Local digital lending development and the incidence of deprivation in Kenya," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-26, December.
    6. Klaus E. Meyer & Jiatao Li & Keith D. Brouthers & Ruey-Jer ‘‘Bryan’’ Jean, 2023. "International business in the digital age: Global strategies in a world of national institutions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(4), pages 577-598, June.
    7. Anthea Paelo & Simon Roberts, 2022. "Competition and Regulation of Mobile Money Platforms in Africa: A Comparative Analysis of Kenya and Uganda," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 60(3), pages 463-489, May.
    8. Maty Konte & Godsway Korku Tetteh, 2023. "Mobile money, traditional financial services and firm productivity in Africa," Small Business Economics, Springer, vol. 60(2), pages 745-769, February.
    9. Ablam Estel Apeti, 2022. "Household welfare in the digital age: Assessing the effect of mobile money on household consumption volatility in developing countries," Post-Print hal-03819779, HAL.

    More about this item

    JEL classification:

    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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