Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Private investment can be an important engine of economic growth in East African countries, which, despite recent growth rates, are still plagued with adverse economic conditions. Against this backdrop, there has been substantial penetration of mobile money, moving beyond simple person-to-person exchanges toward adoption by private firms. This study explores whether there is a relationship between firm adoption of mobile money and firm investment. Using firm-level data that are nationally representative of the private sector in three East African countries-Kenya, Tanzania, and Uganda-a positive relationship is found between mobile money use and the probability of a firm's purchase of fixed assets. This relationship is attributed to reduced transaction costs, increased liquidity, and increased credit worthiness associated with the use of mobile phone financial services.

Financial Development --- Firms --- Investment --- Mobile Money

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Countries in the Middle East and North Africa (MENA) possess all the ingredients they need to leapfrog into the digital future. They have large, well-educated youth populations that have already adopted new digital and mobile technologies on a wide scale. They have a highly educated female population. That combination has immense potential to drive future growth and job creation. The question is whether the region can adapt to a new economic reality. Public spending, the region's historical engine of development, has reached its limit. Because the public sector can no longer absorb the swelling ranks of university graduates, the MENA region has one of the world's highest rates of youth unemployment. For a variety of reasons, many of them cultural, highly educated women stay home. The female labor participation rate is among the lowest in the world. The digital economy holds the promise of a new way forward, but it is still in its infancy, and young people face obstacles in putting technology to productive use. Although the internet and hand-held devices are ubiquitous throughout the region, they are currently used for accessing social media, rather than for launching new enterprises. But there are green shoots emerging. For example, the ride-hailing app Careem has grown from a start-up to a billion-dollar company, creating thousands of jobs in 80 cities in the MENA region and in Pakistan and Turkey. and new digital platforms are already connecting job seekers and employers, providing vocational training, and hosting start-up incubators. The challenge now is to create the conditions for these green shoots to grow and multiply. The first, essential step is for MENA countries to become "learning societies," a phrase coined by the Nobel laureate economist Joseph E. Stiglitz to describe countries in which shared knowledge leads to increased innovation. This, in turn, fosters development; and in the case of MENA, it could lead to the creation of a vibrant digital service economy. to get there, education systems must change. For the region's young people, the curriculum is more often a source of frustration than advancement. The concept of a "skills premium" - the difference in wages between skilled and unskilled workers-dictates that higher educational attainment should lead to higher compensation and more secure employment. Yet in the MENA region, the opposite has happened: university graduates are far more likely to be unemployed than are workers with only a basic education. Two factors work against the region's young people. First, schools are still geared toward channeling graduates into large public sectors, which means they place less emphasis on fields such as mathematics and science. Second, bloated public sectors are crowding out the private sector, which would otherwise be a larger provider of high-skill, high-wage jobs.

Agricultural Productivity --- Demographics --- Financial Development --- Human Capital --- Infrastructure --- Job Creation --- Venture Capital

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

The purpose of the study is to investigate the effects of financial inclusion on poverty in lowand middle-income countries.
It contributes to the existing literature by 1) developing a financial inclusion measure which uses available cross-country data, 2) focusing on low- and middle-income countries specifically and 3) understanding the link between financial inclusion and poverty in low- and middle-income countries.
A large body of economic literature supports the view that through the availability of finance, investments can be made that increase the productivity of an individual or an enterprise which in turn promotes growth. One can apply this concept also on the very poor who can increase their income through investing in a small business.
The financial inclusion index of this paper contains both the access to as well as the usage of financial products. The empirical analysis focuses on the impact of financial inclusion, along with other control variables, on different measures of poverty.
The results using the fixed effects estimation show that financial inclusion has an alleviating effect on poverty in low- and lower middle-income countries. The absolute reduction in the poverty headcount ratio of 5,50 USD per day is greater than the one at 1,90 USD per day. The negative effect of financial inclusion on poverty holds true under different robustness checks.
It is therefore recommended to encourage financial inclusion through policies and a sound regulatory framework, in order to give the very poor the opportunity to invest in productive business ideas and grow their own businesses.
Also, the range of financial products should be broadened to meet the specific needs of the clients, which may be special savings, loans or insurance products.
The empirical results also reveal other determinants which have an alleviating effect on poverty. Especially education, internet access and trade openness have a significant negative effect on the different poverty measures. Contrary to the endogenous growth theory, external factors, such as net official development aid, also affect the poverty measures.

Financial Inclusion --- Poverty --- Financial Development --- Sciences économiques & de gestion > Méthodes quantitatives en économie & gestion

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

Financial crises can happen for a variety of reasons: (a) nobody really understands what is going on (the collective cognition paradigm); (b) some understand better than others and take advantage of their knowledge (the asymmetric information paradigm); (c) everybody understands, but crises are a natural part of the financial landscape (the costly enforcement paradigm); or (d) everybody understands, yet no one acts because private and social interests do not coincide (the collective action paradigm). The four paradigms have different and often conflicting prudential policy implications. This paper proposes and discusses three sets of reforms that would give due weight to the insights from the collective action and collective cognition paradigms by redrawing the regulatory perimeter to internalize systemic risk without promoting dynamic regulatory arbitrage; introducing a truly systemic liquidity regulation that moves away from a purely idiosyncratic focus on maturity mismatches; and building up the supervisory function while avoiding the pitfalls of expanded official oversight.

Banks & Banking Reform --- Debt Markets --- Emerging Markets --- Finance and Financial Sector Development --- Financial crises --- Financial development --- Financial Intermediation --- Financial policy --- Financial regulation --- Labor Policies --- Regulatory architecture

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

This paper examines how the ability to access long-term debt affects firm-level growth volatility. The analysis finds that firms in industries with stronger preference to use long-term finance relative to short-term finance experience lower growth volatility in countries with better-developed financial systems, as these firms may benefit from reduced refinancing risk. Institutions that facilitate the availability of credit information and contract enforcement mitigate the refinancing risk and therefore growth volatility associated with short-term financing. Increased availability of long-term finance reduces growth volatility in crisis as well as non-crisis periods.

Access To Finance --- Bankruptcy and Resolution of Financial Distress --- Banks and Banking Reform --- Debt Markets --- Debt Maturity --- Emerging Markets --- Financial Dependence --- Financial Development --- Firm Volatility