The ICT environment, financial sector and economic growth: a cross‐country analysis

Abstract

The ICT environment, financial sector and economic growth: a cross-country analysis Farkhanda Shamim Article information:To cite this document: Farkhanda Shamim, (2007),"The ICT environment, financial sector and economic growth: a cross#country If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -The purpose of this paper is to test the hypothesis that, given the financial development of an economy (whether developed or not), e-finance technologies enhance economic growth because they lower processing costs for suppliers and information costs for consumers and therefore increase availability of finance for even low-income borrowers of remote areas. Design/methodology/approach -To analyze the indirect relationship between the level of connectivity and economic growth via its impact on financial development, generalized method of moments (GMM) is applied to cross section data of 61 countries averaged over 13 years (1990)(1991)(1992)(1993)(1994)(1995)(1996)(1997)(1998)(1999)(2000)(2001)(2002).Findings -In all the regression results, it is found that better connectivity particularly by increasing the number of mobile phone subscribers and the number of internet users significantly enhances financial depth, which is a backbone of any country to grow. Practical implications -Based on the empirical findings of current study, it can be concluded that Claessens et al. might be right in saying that for developing countries to exploit opportunities for leapfrogging even with weak financial system, it is important to invest in the sector of information and communication technology. Originality/value -the current study is the first of its kind, which provides empirical and global evidence that the component of financial sector developed by better telecommunication infrastructure is positively associated with long run economic growth and gross capital formation.

Financial development, technology, growth and performance: Evidence from the accession to the EU

“…Demirguc-Kunt and Levine (2001) also illustrate that financial systems are deeper and more efficient in richer countries. The coefficient on TEL is significant at 10% for financial development size (Shamim, 2007). The results offer evidence that the link from ICT infrastructure to financial development is weak during the time period of the study.…”

“…It examines the relation between the technological environment and the size of the financial market. We expect positive relation based on the literature (Shamim, 2007;Zagorchev et al, 2011).…”

Trajectory Dynamics in Innovation: Developing and Transforming a Mobile Money Service Across Time and Place

“…Given the widespread use of mobile phones in the developing world, the role of mobile devices in promoting economic and social development has garnered considerable attention (Aker and Mbiti 2010). Studies have examined the influence of mobile phones on developing countries' well-being (Ganju et al 2016), quality of healthcare (Hoffman et al 2010;Lester et al 2010), access to financial services (Duncombe and Boateng 2009;Mas and Morawczynski 2009;Shamim 2007), and profitability of micro-enterprises (Donner and Escobari 2010;Esselaar et al 2007;Jensen 2007).…”

Support for foreign direct investment inflows in Serbia

“…Having an extremely high diffusion rate, ICT become available and widespread, which is stated in the work by Comin and Hobijn (2010) [7]. Shamim (2007) [37] analysed empirical linkages between increasing ICT penetration and financial markets in emerging economies over the period of 1990-2002, formulating the conclusion about the positive impact of ICT on financial development. Lipsey (2001) [30] distinguishes between foreign direct investments at macro-and micro levels.…”