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How has Mobile Phone Penetration Stimulated Financial Development in Africa?

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  • Simplice A. Asongu

Abstract

In the first macroeconomic empirical assessment of the relationship between mobile phones and finance, the author examines the correlations between mobile phone penetration and financial development using two conflicting definitions of the financial system in the financial development literature. With the traditional International Financial Statistics (IFS) (2008) definition, mobile phone penetration has a negative correlation with traditional financial intermediary dynamics of depth, activity, and size. However, when a previously missing informal-financial sector component is integrated into the definition, mobile phone penetration has a positive correlation with informal financial development. Three implications result: There is a growing role of informal finance; mobile phone penetration may not be positively assessed at a macroeconomic level by traditional financial development indicators; and it is a wake-up call for scholarly research on informal financial development indicators that will orient monetary policy.

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File URL: http://hdl.handle.net/10.1080/15228916.2013.765309
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Journal of African Business.

Volume (Year): 14 (2013)
Issue (Month): 1 (April)
Pages: 7-18

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Handle: RePEc:taf:wjabxx:v:14:y:2013:i:1:p:7-18

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References

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  1. Simplice A., Asongu, 2011. "Law and finance in Africa," MPRA Paper 34080, University Library of Munich, Germany.
  2. Demombynes, Gabriel & Thegeya, Aaron, 2012. "Kenya's mobile revolution and the promise of mobile savings," Policy Research Working Paper Series 5988, The World Bank.
  3. Asongu Simplice, 2010. "Bank Efficiency and Openness in Africa: Do Income Levels Matter?," Working Papers 10/001, African Governance and Development Institute., revised 18 Dec 2011.
  4. Asongu Simplice, 2011. "Law, finance, economic growth and welfare: why does legal origin matter?," Working Papers 11/007, African Governance and Development Institute..
  5. Simplice A., Simplice, 2011. "Why do French civil-law countries have higher levels of financial efficiency?," MPRA Paper 33950, University Library of Munich, Germany.
  6. Asongu Simplice, 2011. "New financial intermediary development indicators for developing countries," Working Papers 11/005, African Governance and Development Institute..
  7. Asongu Simplice, 2011. "Finance and Democracy in Africa," Working Papers 11/020, African Governance and Development Institute..
  8. Ndikumana, Leonce, 2000. "Financial Determinants of Domestic Investment in Sub-Saharan Africa: Evidence from Panel Data," World Development, Elsevier, vol. 28(2), pages 381-400, February.
  9. Enowbi Batuo, Michael & Guidi, Francesco & Mlambo, Kupukile, 2010. "Financial Development and Income Inequality: Evidence from African Countries," MPRA Paper 25658, University Library of Munich, Germany.
  10. Jenny Aker and Isaac M. Mbiti, 2010. "Mobile Phones and Economic Development in Africa," Working Papers 211, Center for Global Development.
  11. Mas, Ignacio & Radcliffe, Daniel, 2011. "Mobile Payments Go Viral: M-PESA in Kenya," Journal of Financial Transformation, Capco Institute, vol. 32, pages 169-182.
  12. Antonio Rodriguez Andres, 2006. "Software piracy and income inequality," Applied Economics Letters, Taylor & Francis Journals, vol. 13(2), pages 101-105.
  13. Jenny C. Aker & Isaac M. Mbiti, 2010. "Mobile Phones and Economic Development in Africa," Journal of Economic Perspectives, American Economic Association, vol. 24(3), pages 207-32, Summer.
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Cited by:
  1. Asongu Simplice, 2012. "Fighting consumer price inflation in Africa. What do dynamics in money, credit, efficiency and size tell us?," Working Papers 12/011, African Governance and Development Institute..
  2. Simplice A Asongu, 2013. "How has politico-economic liberalization affected financial allocation efficiency? Fresh African evidence," Economics Bulletin, AccessEcon, vol. 33(1), pages 663-676.
  3. Asongu Simplice, 2013. "The impact of mobile phone penetration on African inequality," Working Papers 13/021, African Governance and Development Institute..
  4. Simplice A, Asongu, 2013. "The ‘Knowledge Economy’-finance nexus: how do IPRs matter in SSA and MENA countries?," MPRA Paper 43541, University Library of Munich, Germany.
  5. Simplice A. Asongu, 2014. "The “knowledge economy”–finance nexus in SSA and MENA countries," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing, vol. 7(2), pages 200-213, July.
  6. Asongu, Simplice A, 2013. "Does Money Matter in Africa? New Empirics on Long- and Short-run Effects of Monetary Policy on Output and Prices," MPRA Paper 48494, University Library of Munich, Germany.
  7. Simplice A Asongu, 2013. "How do financial reforms affect inequality through financial sector competition? Evidence from Africa," Economics Bulletin, AccessEcon, vol. 33(1), pages 401-414.
  8. Simplice A, Asongu & Oasis, Kodila-Tedika, 2013. "Fighting African Conflicts and Crimes: Which Governance Tools Matter?," MPRA Paper 44044, University Library of Munich, Germany.
  9. Asongu, Simplice A, 2013. "Finance and growth: New evidence from Meta-analysis," MPRA Paper 52210, University Library of Munich, Germany.

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