On the diffusion of mobile phone innovations for financial inclusion

Abstract

Abstract This article investigates nexuses between innovations in mobile money and financial inclusion. Demand and supply factors that affect the diffusion of mobile services as well as macro-level institutional and economic factors are taken in account. The focus is on 148 countries with data mostly consisting of 2010-2014 averages. The empirical evidence is based on Tobit regressions. The study finds that when the empirical analysis is robust to multicollinearity, two main tendencies are apparent: the significant findings of Lashitew et al. [ 1 ] are confirmed and many new significant estimated coefficients emerge. While this study confirms the findings of the underlying research, it also goes further to improve the harmony in narratives between the predictors and the outcome variables. Accordingly, by accounting for multicollinearity, the earlier findings are now more consistent across the set of predictors (i.e. demand and supply factors) and the attendant financial inclusion outcomes (i.e. mobile money accounts, mobile used to send money and mobile used to receive money).