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Payment Instruments, Finance and Development

Author

Listed:
  • Beck, T.H.L.

    (Tilburg University, School of Economics and Management)

  • Pamuk, H.

    (Tilburg University, School of Economics and Management)

  • Uras, R.B.

    (Tilburg University, School of Economics and Management)

  • Ramrattan, R.

Abstract

This paper studies the effects of a payment technology innovation (mobile money) on entrepreneurship and economic development in a quantitative dynamic general equilibrium model. In the model mobile money dominates fiat money as a medium of exchange, since it avoids the risk of theft, but comes with electronic transaction costs. We show that entrepreneurs with higher productivity and access to trade credit are more likely to adopt mobile money as a payment instrument vis-a-vis suppliers. Calibrating the stationary equilibrium of the model to match firm-level data from Kenya, we show significant quantitative implications of mobile money for entrepreneurial growth and macroeconomic development.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Beck, T.H.L. & Pamuk, H. & Uras, R.B. & Ramrattan, R., 2018. "Payment Instruments, Finance and Development," Other publications TiSEM d53ec9c0-36d7-430e-95ab-a, Tilburg University, School of Economics and Management.
    • Handle: RePEc:tiu:tiutis:d53ec9c0-36d7-430e-95ab-ad1095183764
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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