Payment instruments, finance and development

Beck, Thorsten; Pamuk, Haki; Ramrattan, R.; Uras, Burak

doi:10.1016/j.jdeveco.2018.01.005

Cited by 222 publications

(137 citation statements)

References 36 publications

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“…In terms of financing, research indicates that big data-based risk evaluation can help save transaction cost and decrease the degree of information asymmetry, thus helping small-and micro-businesses secure financing (Moenninghoff and Wieandt, 2013). In terms of household economics and finance, a research by Beck et al (2018) found that mobile payments could help improve entrepreneurship execution and decrease the degree of information asymmetry, thus improving entrepreneurial performance. Grossman and Tarazi (2014) found that digital finance was helpful for peasant households in It can be seen from the above review that, as an important component of the financial market, digital finance has infiltrated all aspects of daily life.…”

Section: Literature Reviewmentioning

confidence: 99%

The impact of digital finance on household consumption: Evidence from China

2020

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Using panel data from the China Household Finance Survey (CHFS) in 2013, 2015, and 2017 and the digital inclusive finance index developed by Peking University, this study examined impacts of the digital inclusive finance on household consumption and explored its mechanisms.Results suggest that the digital inclusive finance could promote households consumption. A heterogeneity analysis showed that households with fewer assets, lower income, less financial literacy and in third-and fourth-tier cities experienced larger facilitating effects of digital finance on consumption compared to their counterparts. For consumption categories, digital finance was positively correlated with food, clothing, house maintenance, medical care, and education and entertainment expenditures. In terms of consumption structure, digital finance mainly promoted the recurring household expenditures rather than the non-recurring expenditures. Further analyses based on the mediating model found that online shopping, digital payment, obtainment of online credit, purchase of financing products on the internet and business insurance, were the main mediating variables through which digital finance affected household consumption.

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Section: Literature Reviewmentioning

confidence: 99%

The impact of digital finance on household consumption: Evidence from China

2020

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“…This impact is related to reduced transactional costs, increased firms' liquidity, and increased ability to establish credit worthiness by using data generated by mobile financial services use. Beck et al (2018) have also documented theoretical and empirical impacts of MFS (M-Pesa) on firms' productivity. They point out that entrepreneurs are more willing to use MFS as means of payment to better secure their transactions, and better manage cash flows.…”

Section: How Do Mobile Financial Services Impact the Shadow Economy?mentioning

confidence: 99%

“…For La Porta and Shleifer (2014), informal firms are unproductive not only because their productivity is low and informal entrepreneurship is associated mostly with subsistence, but also because they use cash as the only means of payment. Therefore, moving from cash to digital payments (MFS as means of payment) promotes productivity/profitability, by reducing operational costs and making commercial transactions more secure, fluid and cheaper, as documented by Klapper (2017), and Beck et al (2018). These efficiency gains increase the opportunity costs of staying in the small-scale and less productive informal sector.…”

Section: How Do Mobile Financial Services Impact the Shadow Economy?mentioning

confidence: 99%

Informal Sector and Mobile Financial Services in Developing Countries: Does Financial Innovation Matter?

2019

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This paper investigates the impact of mobile financial services -MFS (mobile money, and mobile credit and savings) on the informal sector. Using both parametric and non-parametric methods on panel data from 101 emerging and developing countries over the period 2000-15, we find that MFS negatively affect the size of the informal sector. According to estimates derived from propensity score matching, MFS adoption decreases the informal sector size in a range of 2.4 -4.3 percentage points of GDP. These formalization effects may stem from different possible transmission channels: improvement in credit access, increase in the productivity/profitability of informal firms attenuating subsistence constraints typical of entrepreneurship in the informal sector, as well as possible induced growth of firms already in the formal sector. The robustness of these results is supported by the use of an alternative estimation approach (instrumental variables). These findings lay the groundwork for the scarce literature on the macroeconomic impact of mobile financial services, a major dimension of the growing drive towards economic digitalization.

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“…MP improves the effi ciency of existing trade and facilitates transactions that would not have occurred otherwise. Plyler et al (2010) found that M-Pesa in Kenya has promoted the growth rate of small-scale fi rms at the community level, and Beck et al (2018) showed that the availability of MP reduced the incidence of theft and output losses, thus improving the potential returns of engaging in business.…”

mentioning

confidence: 99%

“…Simply having a mobile phone can potentially open mobile money accounts, which serve as a gateway to other financial services (Demirguc-Kunt et al, 2018;Lai et al, 2020). Beck et al (2018) analyzed the effects of payment technology innovation on entrepreneurship and economic development and concluded that broader approaches to improving access to financial services, including payment services, are critical for alleviating fi nancial constraints and stimulating business performance.…”

mentioning

confidence: 99%

Mobile Payment and Informal Business: Evidence from China's Household Panel Data

Xue

2020

China and World Economy

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This paper uses household panel data to explore the impact of mobile payments on China's household business activity. Using a difference‐in‐difference fixed effect specification, I find that mobile payment users are more likely to operate small‐scale and self‐employed informal businesses. The impact of using mobile payment primarily derives from the transition of agricultural families to business owners and the development of informal businesses. The paper illustrates an associated increase in employment and income for family members, with more pronounced effects on low‐income and rural households. It also provides prima facie evidence of the increase in fund transfers, which is important for risk sharing that informal businesses may encounter.

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Payment instruments, finance and development

Cited by 222 publications

References 36 publications

The impact of digital finance on household consumption: Evidence from China

The impact of digital finance on household consumption: Evidence from China

Informal Sector and Mobile Financial Services in Developing Countries: Does Financial Innovation Matter?

Mobile Payment and Informal Business: Evidence from China's Household Panel Data

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