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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, this paper 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 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 which will oriented monetary policy.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 41198.

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Date of creation: 10 Sep 2012
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Handle: RePEc:pra:mprapa:41198

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Keywords: Banking; Mobile Phones; Shadow Economy; Financial Development; Africa;

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References

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  1. Simplice A. Asongu, 2012. "Law and Finance in Africa," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 55(4), pages 385-408.
  2. Asongu Simplice, 2011. "Finance and Democracy in Africa," Working Papers 11/020, African Governance and Development Institute..
  3. Asongu Simplice, 2011. "New financial intermediary development indicators for developing countries," Working Papers 11/005, African Governance and Development Institute..
  4. Simplice A, Asongu, 2010. "Bank efficiency and openness in Africa: do income levels matter?," MPRA Paper 27011, University Library of Munich, Germany.
  5. 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.
  6. Antonio Rodriguez Andres, 2006. "Software piracy and income inequality," Applied Economics Letters, Taylor & Francis Journals, vol. 13(2), pages 101-105.
  7. Simplice A., Simplice, 2011. "Why do French civil-law countries have higher levels of financial efficiency?," MPRA Paper 33950, University Library of Munich, Germany.
  8. Jenny Aker and Isaac M. Mbiti, 2010. "Mobile Phones and Economic Development in Africa," Working Papers 211, Center for Global Development.
  9. 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.
  10. Mas, Ignacio & Radcliffe, Daniel, 2011. "Mobile Payments Go Viral: M-PESA in Kenya," Journal of Financial Transformation, Capco Institute, vol. 32, pages 169-182.
  11. Demombynes, Gabriel & Thegeya, Aaron, 2012. "Kenya's mobile revolution and the promise of mobile savings," Policy Research Working Paper Series 5988, The World Bank.
  12. 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.
  13. Asongu Simplice, 2011. "Law, finance, economic growth and welfare: why does legal origin matter?," Working Papers 11/007, African Governance and Development Institute..
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Citations

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Cited by:
  1. Simplice A Asongu, 2013. "The ‘Knowledge Economy'-finance nexus: how do IPRs matter in SSA and MENA countries?," Economics Bulletin, AccessEcon, vol. 33(1), pages 78-94.
  2. Asongu, Simplice A, 2013. "How has politico-economic liberalization affected financial allocation efficiency? Fresh African evidence," MPRA Paper 44995, University Library of Munich, Germany.
  3. Simplice A, Asongu, 2012. "Fighting consumer price inflation in Africa. What do dynamics in money, credit, efficiency and size tell us?," MPRA Paper 41553, University Library of Munich, Germany.
  4. Asongu, Simplice A, 2012. "The impact of mobile phone penetration on African inequality," MPRA Paper 46041, University Library of Munich, Germany, revised 08 Apr 2013.
  5. Asongu, Simplice A, 2013. "How do financial reforms affect inequality through financial sector competition? Evidence from Africa," MPRA Paper 44410, University Library of Munich, Germany.
  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. Asongu Simplice, 2013. "The Knowledge Economy-finance nexus in SSA and MENA countries," Working Papers 13/022, African Governance and Development Institute..
  8. Asongu, Simplice A, 2013. "Finance and growth: New evidence from Meta-analysis," MPRA Paper 52210, University Library of Munich, Germany.
  9. Simplice A, Asongu & Oasis, Kodila-Tedika, 2013. "Fighting African Conflicts and Crimes: Which Governance Tools Matter?," MPRA Paper 44044, University Library of Munich, Germany.

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