The effect of ICT on financial sector development in Africa: does regulatory quality matter?

Isiaka Akande Raifu, Ismaila Adeleye Okunoye and Alarudeen Aminu

Information Technology for Development, 2024, vol. 30, issue 3, 424-451

Abstract: The moderating role of regulatory quality in the relationship between ICT and financial development in Africa is investigated in this study. We employ data from 38 African countries from 2003 to 2020. For the analysis, a two-step system GMM is used. Our findings demonstrate that ICT and regulatory quality are essential for financial development. The net effect of ICT and regulatory quality on financial development is positive, implying that regulatory quality moderates upwards the nexus between ICT and financial development. On different financial development indicators, ICT improves financial depth and access but deteriorates financial efficiency and stability. The net effects of ICT and regulatory quality are positive for financial depth and efficiency and negative for financial access and stability. It is, therefore, imperative for the government to improve regulatory quality in Africa, given the significance of ICT and regulatory quality in supporting financial development.

Date: 2024
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DOI: 10.1080/02681102.2023.2233458

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