Adoption of mobile money and financial inclusion: a macroeconomic approach through cluster analysis

This paper investigates the patterns of adoption of mobile money in emerging and developing countries. Mobile money is a mobile-based service, which provides access to low-cost financial services for people excluded from the banking system. It is designed to overcome the difficulties related to entering the banking system and the unavailability of banking infrastructure. Drawing on macroeconomic comparative and case study analysis conducted by practitioner experts, this study takes a wide macroeconomic approach to the adoption of mobile money adoption in 2011 and 2014, based on the alternative strategy of cluster analysis. We exploit the new technology diffusion frameworks to evaluate dissimilarity among groups of countries with similar levels of adoption of mobile money. We investigate whether adoption of mobile money services are highest in countries where access to formal banking services is lowest. Our analytical results support the predictions in the technology diffusion literature and nuance the potential of mobile money as a tool to counter banking exclusion.     

Determinants of adoption of Internet in Africa: Case of 17 sub-Saharan countries

This study develops two-level hierarchical model that identifies factors that favor or hamper the use of Internet in Africa. We used data from a survey covering 17 African countries. Our results confirm that urbanization and the spread of Internet infrastructures play an important role in individual decisions to adopt this technology. They also reveal that an individual will have a larger probability to use Internet if he/she has at least completed primary education.Moreover, individual characteristics such as sex, age, level of education, and a social network membership greatly influence Internet adoption. Indeed, men are more likely to use Internet than women; this probability is larger if they are young (16–30 years old) or if they attained at least secondary education level or if they are members of a social network.     

Heaven's Swing Door: Endogenous Skills,Migration Networks,and the Effectiveness of Quality‐Selective Immigration Policies

A growing number of OECD countries are leaning toward the adoption of selective immigration policies, which are expected to raise the quality (or education level) of migrants. This view neglects two important dynamic effects: the role of migration networks, which could reduce the quality of migrants, and the responsiveness of education decisions to the prospect of migration. We propose a model of self‐selection into migration with endogenous education choices, which predicts that migration networks and the quality of migrants can be positively associated when destination countries adopt sufficiently selective immigration policies. Empirical evidence, presented as background motivation, suggests that this is indeed the case.     

Financing Higher Education in a Mobile World

This paper analyzes how integrated labor markets affect the financing of higher education. For this, we employ a general‐equilibrium model with overlapping generations and individuals who differ in their abilities. At the first stage, governments can choose the quality of education and the financing system. At the second stage, individuals make their education and migration decisions given the governmental framework for higher education and the mobility assumptions. In a closed economy and in the presence of imperfect credit markets, a mix of tax‐ and fee‐financing is optimal. In integrated labor markets, countries have an incentive to attract skilled workers and to free‐ride on education provided by other countries. When only skilled workers are mobile, there is a suboptimal shift from taxes to fees and the number of students is too low. When also students can migrate, there is a countervailing force such that maintaining the optimal financial mix becomes possible.     

Does women’s participation in agricultural technology adoption decisions affect the adoption of climate‐smart agriculture? Insights from Indo‐Gangetic Plains of India

Increased participation of women in the agricultural technology adoption decision by farm households is one of the key indicators of gender empowerment in the agricultural sector. This study examines whether women’s participation in the household decision to adopt agricultural technology affects the adoption of climate‐smart agriculture (CSA), using data collected from 1,267 farm households from two Indian states of Bihar and Haryana. When we considered the sex of the household head (using a dummy variable for male‐headed vs female‐headed household) as a basis of analyzing the role of gender in the adoption of CSA, we found that women in Haryana had no role in the adoption of CSA. On the contrary, when we considered women’s participation in technology adoption decisions as a basis of gender analysis, we found that women’s participation in technology adoption decisions in Haryana is much higher as compared to Bihar. Consequently, the likelihood to adopt CSA is higher in Haryana than in Bihar. We also found that wealth, training, and access to extension and market positively influenced CSA adoption. Qualitative analysis shows that women farmers prioritize family food security rather than farm income, and therefore, they are more likely to focus on CSA to ensure food security.     

Mobile money adoption and households’ vulnerability to shocks: Evidence from Togo

ABSTRACT

We investigate the determinants of mobile money adoption process and whether its use helps households in Togo to be resilient to predictable and unpredictable life events. Using ordered logit and sequential logit models, our results show that in the adoption process, households benefit from weak ties of social groups such as religious group and informal saving group for the adoption of mobile money. We equally find that being client of banks or microfinance institutions act as powerful channels from one step to another in the process. Besides, our findings reveal that households whoever use mobile money seem to be more resilient to climatic shocks such as drought, irregular rain, soil degradation, erosion and fertility reduction and to shock that affect households’ assets (non-climatic: high prices of agricultural inputs). However, the picture is more contrasted when the individuals are classified by disadvantaged groups such as rural people, women, less educated and people with low incomes.     

Forecasting livestock prices with individual and composite methods

We investigate the incentives of private firms to adopt new technologies. Econometric investigation is performed on a pooled sample of individual US airline firms over the period 1971 to 1986 for which extensive information on available jet aircraft technology and fleet choice have been recorded. Given the incidence of successive commercial aircraft innovations and variation in production attributes across firms, we are able to consider a wider array of ‘time-dependent’ and ‘time-independent’ adoption influences than in previous firm-level studies. To the extent that our study provides useful general insights into adoption decisions by firms, the results have implications for US global competitiveness policy. One key finding is that firms subject to increased product market competition exhibit a higher propensity to adopt technological innovations.     

The impact of regulation and competition on the adoption of fiber-based broadband services: recent evidence from the European union member states

Fiber deployment of next-generation high-speed broadband networks is considered to be a decisive development for any information-based society, yet investment activities and especially the adoption of fiber-based broadband services take place only very gradually in most countries. This work employs static and dynamic model specifications and identifies the most important determinants of the adoption of fiber-based broadband services with recent panel data from the European Union member states for the years from 2004 to 2012. The results show that the more effective previous broadband access regulation is, the more negative the impact on adoption, while competitive pressure from mobile networks affects adoption in a non-linear manner. Finally, we also find evidence for substantial network effects underlying the adoption process.     

Mobile money,risk sharing,and educational investment: Panel evidence from rural Uganda

We examine the impact of the rapidly expanding mobile banking service “mobile money” on rural households' ability to smooth investment in schooling after a negative shock. We find that a negative shock induces a 9.3‐percentage point decrease in per school‐age child educational expenditure for households who do not use mobile money compared to an 8.3‐percentage point decrease for households that have adopted mobile money. The underlying mechanism is an increase in remittance receipt and the diversity of senders owing to the reduction in transactions cost provided by mobile money. We show that our results are robust to alternative mechanisms. We use the expansion in mobile money agent network as an exogenous variation in access to mobile money.     

Banking distress in MENA countries and the role of mergers as a strategic policy to resolve distress

This paper studies banking distress in MENA countries and considers the extent to which mergers are used as a solution for resolving individual banking distress. We use a two-level nested logit model to model the interdependence between merger decisions and the distressed state of banks. Both bank-specific variables and macroeconomic variables are deployed to predict banking distress. In line with other recent papers, we challenge the view that specific bank indicators such as CAMEL category and bank size are more significant determinants of banking distress than macroeconomic variables. A comparison of model fits and out-of-sample forecasts indicates that the unordered NL model statistically outperforms a standard logit model by substantial margins. Our empirical study shows that 67% of the distressed banks in our sample are involved in merger transactions and that weak financial status systematically increases the likelihood of a bank being involved in a merger. Distressed state-owned banks are less likely to be a target of a merger transaction. However, global economic conditions do not significantly affect the decision of distressed banks to initiate a merger policy.     

DRUG POLICY AND INTERGENERATIONAL INCOME MOBILITY IN THE UNITED STATES

A conviction for drug possession blocks some of the most common pathways through which individuals from low income families achieve upward economic mobility in the United States, such as access to higher education, entry‐level employment, and military service. These considerations are of growing importance because the number of drug‐related arrests have nearly quadrupled since 1980. This article estimates the effect of a conviction for drug possession on earnings mobility using a sample of individuals born between 1980 and 1984, some of the first cohorts to come of age in the context of intensive U.S. drug criminalization and enforcement. To distinguish the effect of a drug conviction from the effect of drug use or general criminality, I compare mobility among individuals with drug convictions to control groups who self‐report significant drug use and who have had interactions with the criminal justice system that did not lead to a drug conviction. I find that relative to these groups, a drug conviction reduces the probability of transitioning upward from various points in the lower half of the income distribution by 10–15 percentage points, or as much as 50%, and that these effects are substantially stronger for non‐whites than for whites. These findings suggest that a policy of decriminalizing nonviolent drug possession would substantially increase intergenerational mobility among low income populations, and this effect should be weighed alongside more conventional costs and benefits in formulating optimal drug policy. (JEL J38, J15, K42)     

Tipping the (Im)balance: Capital inflows,financial market structure,and banking crises

An emerging consensus among scholars and policy‐makers identifies foreign capital inflows as one of the primary determinants of banking crises in developed countries. We challenge this view by arguing that external imbalances are destabilizing only when banks face substantial competition from securities markets in the process of financial intermediation. We assemble a dataset of banking crises covering the advanced industrialized countries from 1976 to 2011 and find evidence of a conditional relationship between capital inflows, a well‐developed securities market, and the incidence of banking crises. We further explore the impact of capital inflows on banks’ actual risk taking as indicated by their capital adequacy levels and measures of insolvency risk. Our results demonstrate that prudential capital cushions tend to decline with the combination of capital inflows and prominent securities markets. We highlight the political decisions—often made during the early days of a country's financial development—that determine the relative prominence of banks vs. non‐bank financial institutions and conclude with policy recommendations.     

Individualism and the adoption of clean energy technology

Why do 20% of Swedes report having adopted a clean energy system while the corresponding share of Spaniards equals 0.4%? Using data for about 25,000 individuals across 33 countries, this study tests which cultural trait, individualism or collectivism, is associated with greater levels of clean technology adoption. Our fractional probit estimates suggest that individualistic individuals are more inclined to adopt clean energy systems for home and transport purposes. In particular, the adoption probability rises by an estimated 2% if a person exhibits individualistic values. This finding is not driven by country-specific tax or subsidy policies or market-specific determinants and is robust to controlling for individual and household characteristics, attitudes, social and personal norms and other significant dimensions of cultural differences. The results, therefore, facilitate an understanding of how the decision to adopt clean energy technologies can be driven by cultural factors.     

Consumption and communication perspectives of IT in a developing economy

Technological innovations are important sources of competitive advantage when there is a balanced rate of adoption that helps organisations maintain or improve performance levels. This paper synthesises and builds on efforts to conceptualise the adoption and implementation of technologically induced customer services in developing countries. Its point of departure is recent advances in computer-mediated marketing environments (CMMEs). It assesses relationships between customer services and evolving technologies in the provision of services in the banking sector. Using phenomenological hermeneutics and a case study approach, we iteratively engaged with data that emerged to identify core values and community-based values. These facets were further developed into seven main issues (core values: quality, education and reach, and community-based values: efficiency, usability, control and security). The paper offers practical steps by which companies and institutions may counter these issues and the theoretical implications for wider considerations are discussed.     

Who you are or whom you know? Consumption interdependences in social networks

This paper presents an analysis of whether a consumer's decision to switch from one mobile phone provider to another is driven by individual consumer characteristics or by actions of other consumers in her social network. Such consumption interdependences are estimated using a unique dataset, which contains transaction data based on anonymized call records from a large European mobile phone carrier to approximate a consumer's social network. Results show that network effects have an important impact on consumers’ switching decisions: switching decisions are interdependent between consumers who interact with each other and this interdependence increases in the closeness between two consumers as measured by the calling data. In other words, if a subscriber switches carriers, she is also affecting the switching probabilities of other individuals in her social circle. The paper argues that such an approach is of high relevance to both switching of providers and to the adoption of new products.     

ICT for financial access: Mobile money and the financial behavior of rural households in Uganda

Mobile money usage has expanded tremendously in Uganda, reaching over 40% of the adult population within 8 years of inception. We use data from 820 rural households to examine the effect of this financial innovation on their financial behavior. We find that using mobile money services increases the likelihood of saving, borrowing, and receiving remittances. The corresponding amounts of each service are also significantly higher among mobile money user households relative to their nonuser counterparts. We demonstrate that the mechanism of this impact is a reduction in transaction costs—a combination of transportation fares and service charges—associated with household proximity to mobile money agents. To illustrate the convenience of service proximity, we demonstrate that the household's likelihood and frequency of using mobile money services reduces with the distance to the nearest mobile money agent. This distance variable is then used to instrument for the potentially endogenous mobile money adoption. We finally perform propensity score matching to reinforce the robustness of our results; our results are consistent across all these specifications. The results imply that developing and enhancing access to and usage of pro‐poor financial products could be a first step to achieving greater financial inclusion.     

Narrowing the gender digital divide in Pakistan: Mobile phone ownership and female labor force participation

The unprecedented growth in access to mobile phones and smartphones has opened up new possibilities in the way people live and work. However, women in developing countries are unable to take advantage of this growth due to certain factors and socio-cultural norms that give rise to the gender digital divide. In this study, using the nationally representative Pakistan Social and Living Standards Measurement Survey (2019–2020), we investigate the gender and rural–urban (female) digital divide in a country with one of the most considerable digital divides. Furthermore, we employ an instrumental variable approach to study the effect of mobile or smartphone ownership on female labor force participation. The results indicate that institutional and sociocultural norms explain most of the ownership gap of mobile or smartphones between men and women. The instrumental variable approach demonstrates that mobile or smartphone ownership increases the participation of women in the labor force. We also find that the differences between observable characteristics, especially literacy and education, explain the rural–urban digital divide among females. Considering the importance of mobile or smartphone ownership in facilitating women's labor supply decisions, providing women with digital tools and upskilling them has wider implications for their economic well-being.     

The determinants of entrepreneurship gender gaps: A cross‐country analysis

This paper uses aggregate data from the International Labor Organization and microeconomic data from the European Values Study to quantify gender gaps in entrepreneurship, distinguishing between gender gaps in employership and in self‐employment, and study their main empirical determinants. Our sample consists of 40 European countries and varies broadly in terms of institutional background since it includes several ex‐Communist countries. In the aggregate data we observe a gender gap in employers of 59% and a gender gap in self‐employment of 36%. These gaps have remained roughly constant in the 2000–2017 period, although there are wide differences in both their levels and evolution over time and across countries. Using microeconomic data, we find that the incidence of entrepreneurship, employership, and self‐employment among men is much larger than among women, consistent with the gaps estimated using aggregate data. Our regressions show that these gaps are still sizable even after controlling for a large set of control variables that include marital status, age, education, number of children, wealth, the participation of parents and spouse in entrepreneurship, values toward women, social capital, and prior unemployment. We identify important differences between the determinants of these gaps in ex‐Communist countries and in high‐income ones.     

The drivers of foreign currency‐based banking in Central and Eastern Europe

Foreign currency (FX)‐based loans and deposits became very popular in Central and Eastern European countries (CEECs) over the 2000–2011 period. In this paper, I simultaneously examine the demand‐side (consumer‐related) and supply‐side (bank‐related) determinants of the quick spread of FX banking. I use a newly constructed dataset on FX and domestic currency loans, deposits and interest rates, covering 16 CEECs overtime. Local‐FX interest rate and market share spreads are: (1) lower in managed currency regimes; (2) strongly affected by the prevalence of FX funding, currency mismatch and FX banking restrictions, and (3) wider after economic crises.     

An Integrated Model of the Adoption and Extent of E-Commerce in Firms

This work aims to explain firms’ decisions to adopt Internet-based e-commerce, and the extent to which the adopters subsequently implement e-commerce to commercialize their products and services. We examine various types of factors previously considered by the literature (competitive environment, organizational characteristics, strategic orientation, innovative capacity, managers’ characteristics, IT equipment possessed and the use made of it). The analytical model developed here on the basis of a sample of 2,038 firms suggests that the factors influencing the adoption decision are different from those that eventually influence the results of firms’ commercial operations on the Internet. Likewise, we discuss the contribution of each type of determinant and the implications.