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The impact of mobile money adoption on firm innovation

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  • Osei-Tutu, Francis
  • Taylor, Daniel

Abstract

Using firm-level survey data for 16 Sub-Saharan African countries, we find evidence that mobile money adoption increases firms’ innovation. Further analysis shows that mobile money fosters innovation by improving firms’ liquidity through greater access to trade credit and bank loans. Our findings suggest that policy measures to stimulate innovation in developing countries could focus on incentivizing firms to adopt mobile money.

Suggested Citation

  • Osei-Tutu, Francis & Taylor, Daniel, 2024. "The impact of mobile money adoption on firm innovation," Economics Letters, Elsevier, vol. 244(C).
    • Handle: RePEc:eee:ecolet:v:244:y:2024:i:c:s0165176524004907
    DOI: 10.1016/j.econlet.2024.112006
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    References listed on IDEAS

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    1. 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.
    2. Aparna Gosavi, 2018. "Can Mobile Money Help Firms Mitigate the Problem of Access to Finance in Eastern sub-Saharan Africa?," Journal of African Business, Taylor & Francis Journals, vol. 19(3), pages 343-360, July.
    3. William Jack & Tavneet Suri, 2014. "Risk Sharing and Transactions Costs: Evidence from Kenya's Mobile Money Revolution," American Economic Review, American Economic Association, vol. 104(1), pages 183-223, January.
    4. repec:cup:jfinqa:v:46:y:2011:i:06:p:1545-1580_00 is not listed on IDEAS
    5. Beck, Thorsten & Pamuk, Haki & Ramrattan, Ravindra & Uras, Burak R., 2018. "Payment instruments, finance and development," Journal of Development Economics, Elsevier, vol. 133(C), pages 162-186.
    6. Gyedu, Samuel & Heng, Tang & Ntarmah, Albert Henry & He, Yingqi & Frimppong, Emmanuel, 2021. "The impact of innovation on economic growth among G7 and BRICS countries: A GMM style panel vector autoregressive approach," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    7. Machokoto, Michael & Omotilewa, Oluwatoba James, 2024. "The impact of borrowing concentration on innovation: When is one not just enough?," Economics Letters, Elsevier, vol. 236(C).
    8. Machokoto, Michael, 2024. "The impact of cultural orientation towards secrecy on innovation," Economics Letters, Elsevier, vol. 234(C).
    9. Ayyagari, Meghana & Demirgüç-Kunt, Asli & Maksimovic, Vojislav, 2011. "Firm Innovation in Emerging Markets: The Role of Finance, Governance, and Competition," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 46(6), pages 1545-1580, December.
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    Keywords

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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