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Do financial innovations improve financial inclusion? Evidence from mobile money adoption in Africa

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  • Avom, Désiré
  • Bangaké, Chrysost
  • Ndoya, Hermann

Abstract

This paper investigates the impact of financial innovations (mobile money) on financial inclusion. Using both parametric and nonparametric methods on panel data from 50 African countries over the period 2004–2020, we find that mobile money adoption positively affects financial inclusion. Indeed, the results from propensity score matching show that mobile money adoption promotes financial inclusion in a range of 12–14 %. These results stem from the match between the services offered to individuals and their needs. Our results remain robust to a battery of robustness checks, including alternative measures of financial inclusion, alternative sample, heterogeneity analysis, as well as alternative estimation method. Overall, this study contributes to the construction of a hitherto underdeveloped literature on the macroeconomic impact of mobile money in the context of digitalization of the financial system.

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  • Avom, Désiré & Bangaké, Chrysost & Ndoya, Hermann, 2023. "Do financial innovations improve financial inclusion? Evidence from mobile money adoption in Africa," Technological Forecasting and Social Change, Elsevier, vol. 190(C).
    • Handle: RePEc:eee:tefoso:v:190:y:2023:i:c:s0040162523001361
    DOI: 10.1016/j.techfore.2023.122451
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    More about this item

    Keywords

    Financial innovations; Financial inclusion; Mobile money; Africa;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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