Africa Calling
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Terney Larsen, Signe1, Forfatter
Dalgaard, Carl-Johan2, Vejleder
1Det Samfundsvidenskabelige Fakultet, Københavns Universitet, København, Danmark, diskurs:7001              
2Økonomisk Institut, Det Samfundsvidenskabelige Fakultet, Københavns Universitet, København, Danmark, diskurs:7014              
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Ukontrollerede emneord: Mobile phones Sub-Saharan Africa Developing Economic Economic Development
 Abstract: This thesis examines how mobile phones affect economic development in Sub-Saharan Africa. The thesis contributes to an existing literature examining the macro economic effects of mobile phones, by constructing a new dataset that makes it possible to analyze the effects of use of mobile phones on economic development across 1,241 subnational districts within 15 countries in Sub-Saharan Africa. Specifically, I test the hypothesis that subnational districts with a high use of mobile phones have experienced higher economic growth than districts with low usage or no usage of mobile phones. The estimation method and data presented in this thesis differs from the existing literature analyzing telecommunications effect on economic development in several ways. First of all, I focus on subnational level instead of country level data. Secondly, instead of applying data on investments in telecommunication or telecommunication subscription penetration rates, I apply a measure of the intensity of use of mobile phones in each subnational district derived from the fourth round of the Afrobarometer household survey. Thirdly, I follow Henderson et al (2012) and use night light density measured from satellites as a proxy for economic activities and development. I control for a variety of geographical characteristics that might affect the fundamental productivity and economic development. The thesis begins with an analysis of why mobile phones should affect economic development from a theoretical perspective. Evidence from existing micro-level studies of the economic effects of mobile phones are combined with general economic theory, to identify possible channels through which mobile phones might affect economic development in Sub-Saharan Africa. The analysis illustrate, that mobile phones may improve market efficiency by reducing search and transaction costs, decrease price dispersions and encourage market participation. Secondly, the mobile phone may improve the financial flows as a result of the introduction of mobile money systems. Thirdly, the introduction of mobile phones may generate new job opportunities. Finally, it may affect the economic development through several indirect channels such as improving population health and reducing corruption. The section is round of with a presentation of the results from related empirical literature on the macro economic effects of telecommunication.
After having illustrated a theoretical fundament for why mobile phones should affect economic development, the development in the accessibility of mobile phones in Sub-Saharan Africa is analyzed, and the characteristics that distinguish mobile phones from other modern telecommunication is discussed. I then proceed with my empirical analysis of the effect of mobile phones on economic development. The results from estimating the log long difference in economic development within each subnational district on use of mobile phones, initial level of income per capita and a variety of geographical controls indicate the use of mobile phones have a positive effect on economic development. The results are robust to a variety of sensitivity checks. However the measures of mobile phones, might be endogenous, causing the OLS estimations to be biased, and the results thus needs to be interpreted with caution. I order to deal with the endogeneity I attempt to find an IV for the use of mobile phones. Unfortunately it is not possible to find a statistically strong instrument variable for the use of mobile phones. However the Anderson-Rubin test indicates that there is a positive causal relationship between the use of mobile phones and economic development, given the exclusion restriction. In conclusion, the results from the empirical analysis are consistent with the hypothesis of mobile phones having a positive effect on economic development. However, because the instrument is weak, the size of the effect of mobile phones needs to be considered with caution.
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Bogmærk denne post:
 Type: Speciale
Alternativ titel: Mobile Phones and Economic Development in Sub-Saharan Africa
Alternativ titel: Afrika Ringer
Alternativ titel: Mobiltelefoner og Økonomisk Udvikling i Afrika Syd for Sahara
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Sprog: Danish - dan
 Datoer: 2013-12-12
 Sider: -
 Publiceringsinfo: København : Københavns Universitet
 Indholdsfortegnelse: 1. Introduction 2
2. Why should mobile phones affect economic development in Sub-Saharan Africa? 5
2.1 Lowered transaction costs and improved market efficiency. 5
2.2 Mobile Phones and Financial Flows – the Mobile-Money Phenomena 8
2.2.1 How big is Mobile Money in Developing Countries and what is it used for? 9
2.3 Creating jobs . 11
2.4 Indirect channels. 11
2.4.1 mHealth . 12
2.4.2 Reduce corruption and election fraud 13
2.5 Review of Literature on Mobile Phones Impact on Economic Growth . 15
2.6 Preliminary conclusion. 19
3. Development in Mobile Phone use and coverage in Sub-Saharan Africa. 20
3.1 Mobile Phone Subscribers 20
3.2 Accessibility – Mobile Phone Coverage. 22
3.2.2 What determines the spread of mobile phone coverage? 27
3.2.3 The competition levels in mobile phones in Sub-Saharan Africa 27
3.3 Accessibility – The Prices of Telecommunications. 28
3.4 Development in other Information Communication Technologies 29
3.5 Preliminary conclusion. 31
4. Empirical Strategy . 32
5. Data 36
5.1 Measuring the use of Mobile Phones – Afrobarometer Round 4 Survey 36
5.2 The Measure of Economic Activity - The Satellite Data on Night Light Density 39
5.3 The population density data. 44
5.4 Geographic control variables. 45
6. Empirical Analysis . 51
6.1 Main results . 51
6.2 Sensitivity checks 55
6.3 The causality concerns 58
6.4 Comparing the effects of use of mobile phones with other forms of ICTs. 63
6.4.1 Mass Media – Radio, Television and Newspapers . 63
6.4.2 Computers and Internet . 64
6.5 Discussion of the results and methodology . 67
7. Future Perspectives 70
7.1.1 The time horizon and the rapid expansion of mobile phones 70
7.1.2 How will the upgrade to smartphones and 3G and 4G mobile phone networks affect economic development? 70
7.1.3 How will the spread of mobile money systems and the expansion to include mobile banking systems affect economic development? 70
7.1.4 Reaching universal coverage 71
8. Conclusion. 72
9. Literature 75
Data Sources 79
10. Appendix . 80
A.1 Districts combined 80
A.2 The Distribution of Luminosity Across Subnational Districts. 82
A.3 The Haversine Formula. 85
A.4 Further Sensitivity Checks 86
A.5 Summary Statistics for alternative sources of obtaining information. 89
 Note: -
 Type: Speciale
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