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The Diffusion of Mobile Phones and its Impact on Financial Inclusion and Economic Growth in Africa

Erlandsson, Frida LU and Lundqvist, Maria LU (2014) NEKN01 20141
Department of Economics
Abstract
The aim of this paper is to examine the effect of mobile phone penetration on economic growth, both directly and through the channel of financial inclusion. Based on a sample of 44 African countries during the period 2000-2011, the relationship between mobile phone penetration, captured by the number of mobile phone subscribers per capita, and economic growth is analysed. Using a dynamic panel data model, the System Generalized Method of Moments (GMM) estimator addresses issues of endogeneity. Further, the African “mobile revolution” in combination with the continent’s large financial infrastructure gap raises an interest to investigate whether financial inclusion can act as a channel through which mobile phone development influences... (More)
The aim of this paper is to examine the effect of mobile phone penetration on economic growth, both directly and through the channel of financial inclusion. Based on a sample of 44 African countries during the period 2000-2011, the relationship between mobile phone penetration, captured by the number of mobile phone subscribers per capita, and economic growth is analysed. Using a dynamic panel data model, the System Generalized Method of Moments (GMM) estimator addresses issues of endogeneity. Further, the African “mobile revolution” in combination with the continent’s large financial infrastructure gap raises an interest to investigate whether financial inclusion can act as a channel through which mobile phone development influences economic growth. The role of mobile phone deployment for financial inclusion is therefore estimated by including variables measuring access to financial services, namely the number of deposits and loans per capita by commercial banks, respectively. The results show that mobile phone penetration has an unambiguously beneficial impact on economic growth in African countries, and a part of the positive effect is channelized through financial inclusion. (Less)
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author
Erlandsson, Frida LU and Lundqvist, Maria LU
supervisor
organization
course
NEKN01 20141
year
type
H1 - Master's Degree (One Year)
subject
keywords
Africa, Economic growth, Generalized methods of moments, Financial development, Financial inclusion, Mobile financial services, Mobile phone penetration
language
English
id
4647621
date added to LUP
2014-09-22 11:44:20
date last changed
2014-09-22 11:44:20
@misc{4647621,
  abstract     = {The aim of this paper is to examine the effect of mobile phone penetration on economic growth, both directly and through the channel of financial inclusion. Based on a sample of 44 African countries during the period 2000-2011, the relationship between mobile phone penetration, captured by the number of mobile phone subscribers per capita, and economic growth is analysed. Using a dynamic panel data model, the System Generalized Method of Moments (GMM) estimator addresses issues of endogeneity. Further, the African “mobile revolution” in combination with the continent’s large financial infrastructure gap raises an interest to investigate whether financial inclusion can act as a channel through which mobile phone development influences economic growth. The role of mobile phone deployment for financial inclusion is therefore estimated by including variables measuring access to financial services, namely the number of deposits and loans per capita by commercial banks, respectively. The results show that mobile phone penetration has an unambiguously beneficial impact on economic growth in African countries, and a part of the positive effect is channelized through financial inclusion.},
  author       = {Erlandsson, Frida and Lundqvist, Maria},
  keyword      = {Africa,Economic growth,Generalized methods of moments,Financial development,Financial inclusion,Mobile financial services,Mobile phone penetration},
  language     = {eng},
  note         = {Student Paper},
  title        = {The Diffusion of Mobile Phones and its Impact on Financial Inclusion and Economic Growth in Africa},
  year         = {2014},
}