EconPapers    
Economics at your fingertips  
 

The drivers of financial development: Global evidence from internet and mobile usage

Canh Nguyen (), Thanh Su and Nadia Doytch

Information Economics and Policy, 2020, vol. 53, issue C

Abstract: We study impact of internet and mobile usage on nine different indicators of financial development (FD), including depth, access, and efficiency of both, financial markets, and financial institutions, as well as overall financial development. We apply Granger causality and cointegration tests, PMG ARDL and PDOLS, and a two-step system GMM to a sample of 109 economies and two sub-samples (62 low- and middle-income economies (LMEs), 47 high-income economies (HIEs)) over the period of 1998–2017. The Granger causality tests show long-run bi-directional causality between internet/mobile usage and financial development. We find that internet usage has a significant negative impact on overall financial development, which could be attributed to a negative impact on financial institutions with all their three dimensions, depth, access, and efficiency. At the same time, internet has significant positive impact on financial markets with its three dimensions. Contrary to the opposing effects internet usage, mobile usage has a significant positive impact on all nine indices of financial development. The PMG ARDL and PDOLS estimations clarify that the positive impact of the internet is a short run effect, while the negative effect is a long-run one. The mobile usage impact is a long-run phenomenon. The estimations for two sub-samples show consistently positive impact of mobile phones in HIEs, whereas the results for LMEs are less robust.

Keywords: Financial development; Financial institutions; Financial market; Technology; Internet; Mobile phone (search for similar items in EconPapers)
JEL-codes: D53 G20 L86 O14 O16 O32 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167624520301360
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:iepoli:v:53:y:2020:i:c:s0167624520301360

DOI: 10.1016/j.infoecopol.2020.100892

Access Statistics for this article

Information Economics and Policy is currently edited by D. Waterman

More articles in Information Economics and Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2021-10-07
Handle: RePEc:eee:iepoli:v:53:y:2020:i:c:s0167624520301360