The Impact of ICT on Financial Development: Evidence from Southeast Asian Countries
Main Article Content
Abstract
This article aims to analyze the impact of Information & Communication Technologies (ICT) on financial development in several Southeast Asian countries (Vietnam, Singapore, Thailand, Indonesia, Malaysia, Brunei, and the Philippines) from 1996 to 2019. Data in this study are collected from the World Bank (World Bank), the International Monetary Fund (IMF), and the Pooled-OLS, random-effects, fixed-effects, and Driscoll-Kraay estimation methods are used. The research results show that ICT has a positive impact on the financial development of some Southeast Asian countries. Based on the research results, some Southeast Asian countries need to have appropriate policies for increasing financial development through ICT.
Keywords:
ICT, Financial development, Southeast Asia
References
Allen, F. et al. (2002). E-finance: An introduction. Journal of Financial Services Research, 22(1), 5-27.
Alshubiri, F. et al. (2019). The impact of ICT on financial development: Empirical evidence from the Gulf Cooperation Council countries. International Journal of Engineering Business Management, 11, 1-14.
Asongu, S. et al. (2018). Is information diffusion a threat to market power for financial access? Insights from the African banking industry. Journal of Multinational Financial Management, 45, 88-104.
Bahri, E.N.A. and Nor, N.H.H.M. (2019). Nonlinear Effect of Financial Development and Foreign Direct Investment in Integration Economies Among ASEAN-5 Countries Following IFRS Adoption. Accounting and Finance-New Perspectives on Banking, Financial Statements and Reporting. https://doi.org/10.5772/intechopen.86104
Bankole, F. and Mimbi, L. (2017). ICT infrastructure and it’s impact on national development: A research direction for Africa. The African Journal of Information Systems, 9(2), 77-101.
Baum, C.F. (2001). Residual diagnostics for cross-section time series regression models. The Stata Journal, 1(1), 101-104.
Beck, T. and Levine, R. (2004). Stock markets, banks, and growth: Panel evidence. Journal of Banking & Finance, 28(3), 423-442.
Benjamin, R. and Wigand, R. (1995). Electronic markets and virtual value chains on the information superhighway. Sloan Management Review, 36(2), 62-73.
Chatterjee, A. (2020). Financial inclusion, information and communication technology diffusion, and economic growth: A panel data analysis. Information Technology for Development, 26(3), 607-635.
Cheng, C.Y. et al. (2021). ICT diffusion, financial development, and economic growth: An international cross-country analysis. Economic Modelling, 94, 662-671.
Chien, M.S. et al. (2020). The non-linear relationship between ICT diffusion and financial development. Telecommunications Policy, 44(9), p. 102023.
Čihák, M. et al. (2013). Financial Development in 205 Economies, 1960 to 2010. Journal of Financial Perspectives, 1(2)), 17-36.
Consoli, D. (2012). Literature analysis on determinant factors and the impact of ICT in SMEs. Procedia-Social and Behavioral Sciences, 62, 93-97.
Domowitz, I. (2002). Liquidity, transaction costs, and reintermediation in electronic markets. Journal of Financial Services Research, 22(1), 141-157.
Driscoll, J.C. and Kraay, A.C. (1998). Consistent Covariance Matrix Estimation with Spatially Dependent Panel Data. The Review of Economics and Statistics, 80(4), 549-560.
Dutta, A. (2001). Telecommunications and economic activity: An analysis of Granger causality. Journal of Management Information Systems, 17(4), 71-95.
Ejemeyovwi, J.O. et al. (2021). ICT adoption, innovation and financial development in a digital world: Empirical analysis from Africa. Transnational Corporations Review, 13(1), 16-31.
González Páramo, J.M. (2017). Financial innovation in the digital age: Challenges for regulation and supervision. Revista de Estabilidad Financiera, 32, 9-37.
Gurley, J. and Shaw, E. (1960). Money in a Theory of Finance. Washington: Brookings.
Hair, J.F.J. et al. (1995). Multivariate Data Analysis (3rd Ed.). New York: Macmillan.
Hannig, A. and Jansen, S. (2010). Financial Inclusion and Financial Stability: Current Policy Issues. Asian Development Bank Institute. No. 259, Tokyo.
IMF. (2022). Access to Macroeconomic & Financial Data. https://data.imf.org/?sk=388DFA60-1D26-4ADE-B505-A05A558D9A42.
Kambil, A. and Short, J.E. (1994). Electronic integration and business network redesign: A roles-linkage perspective. Journal of Management Information Systems, 10(4), 59-83.
Kim, D.H. et al. (2010). Dynamic effects of trade openness on financial development. Economic Modelling, 27(1), 254-261.
Kumar, R.R. (2012). Exploring the interactive effects of remittances, financial development and ICT in Sub-Saharan Africa: An ARDL bounds approach. African Journal of Economic and Sustainable Development, 1(3), 214-242.
Kurniawati, M.A. (2020). ICT infrastructure, innovation development and economic growth: A comparative evidence between two decades in OECD countries. International Journal of Social Economics, 48(1), 141-158.
Lapavitsas, C. and Dos Santos, P.L. (2008). Globalization and contemporary banking: on the impact of new technology. Contributions to Political Economy, 27(1), 31-56.
Law, S.H. (2009). Trade openness, capital flows and financial development in developing economies. International Economic Journal, 23(3), 409-426.
Levine, R. (1997). Financial development and economic growth: Views and Agenda. Journal of Economic Literature, 35(2), 688-726.
Nguyen, C.P. and Lee, G.S. (2021). Uncertainty, financial development, and FDI inflows: Global evidence. Economic Modelling, 99, 1-10.
Nguyen Hoang Minh (2020). Financial development and innovation: Empirical evidence in some Southeast Asian countries. JABES, 2(31), 5-22.
Nguyen Hoang Minh (2021). The impact of innovation and financial development on CO2 emissions: Empirical evidence from ASIAN Countries. Journal of International Economics and Management, 2(31), 21-34.
Palvia, P., Baqir, N. and Nemati, H. (2018). ICT for socio-economic development: A citizens’ perspective. Information & Management, 55(2), 160-176.
Pierri, M.N. and Timmer, M.Y. (2020), Tech in Fin before Fintech: Blessing or Curse for Financial Stability? International Monetary Fund.
Porter, M.E. (1990). The competitive advonioge of notions. Harvard Business Review, 68(2), 73-93.
Riggins, F. and Weber, D. (2016). Exploring the impact of information and communication technology (ICT) on intermediation market structure in the microfinance industry. The African Journal of Information Systems, 8(3), 1-19.
Sahay, R., Čihák, M., N’Diaye, P. and Barajas, A. (2015). Rethinking Financial Deepening: Stability and Growth in Emerging Markets. Revista de Economía Institucional, 17(33), 73-107.
Schumpeter, J.A. (1947). Theoretical problems of economic growth. Journal of Economic History Supplement, 7(1), 1-9.
Svirydzenka, K. (2016). Introducing a New Broad-Based Index of Financial Development. International Monetary Fund.
Tchamyou, V.S. (2017). The role of knowledge economy in African business. Journal of the Knowledge Economy, 8(4), 1189-1228.
Toader, E., Firtescu, B.N., Roman, A. and Anton, S.G. (2018). Impact of information and communication technology infrastructure on economic growth: An empirical assessment for the EU countries. Sustainability, 10(10), p. 3750.
Vu, K., Hanafizadeh, P. and Bohlin, E. (2020). ICT as a driver of economic growth: A survey of the literature and directions for future research. Telecommunications Policy, 44(2), p. 101922.
Wooldridge, J.M. (2001), Econometric Analysis of Cross Section and Panel Data. Cambridge: The MIT Press.
Wooldridge, J.M. (2005). Fixed-Effects and Related Estimators for Correlated Random-Coefficient and Treatment-Effect Panel Data Models. The Review of Economics and Statistics, 87(2), 385-390.
World Bank. (2022). World Development Indicators..
Yousefi, A. (2011). The impact of information and communication technology on economic growth: evidence from developed and developing countries. Economics of Innovation and New Technology, 20(6), 581-596.
Zagorchev, A. et al. (2011). Financial development, technology, growth and performance: Evidence from the accession to the EU. Journal of International Financial Markets, Institutions and Money, 21(5), 743-759.
Zoroja, J. (2016). Impact of ICTs on innovation activities: Indication for selected European countries. Naše Gospodarstvo/Our Economy, 62(3), 39-51.
Alshubiri, F. et al. (2019). The impact of ICT on financial development: Empirical evidence from the Gulf Cooperation Council countries. International Journal of Engineering Business Management, 11, 1-14.
Asongu, S. et al. (2018). Is information diffusion a threat to market power for financial access? Insights from the African banking industry. Journal of Multinational Financial Management, 45, 88-104.
Bahri, E.N.A. and Nor, N.H.H.M. (2019). Nonlinear Effect of Financial Development and Foreign Direct Investment in Integration Economies Among ASEAN-5 Countries Following IFRS Adoption. Accounting and Finance-New Perspectives on Banking, Financial Statements and Reporting. https://doi.org/10.5772/intechopen.86104
Bankole, F. and Mimbi, L. (2017). ICT infrastructure and it’s impact on national development: A research direction for Africa. The African Journal of Information Systems, 9(2), 77-101.
Baum, C.F. (2001). Residual diagnostics for cross-section time series regression models. The Stata Journal, 1(1), 101-104.
Beck, T. and Levine, R. (2004). Stock markets, banks, and growth: Panel evidence. Journal of Banking & Finance, 28(3), 423-442.
Benjamin, R. and Wigand, R. (1995). Electronic markets and virtual value chains on the information superhighway. Sloan Management Review, 36(2), 62-73.
Chatterjee, A. (2020). Financial inclusion, information and communication technology diffusion, and economic growth: A panel data analysis. Information Technology for Development, 26(3), 607-635.
Cheng, C.Y. et al. (2021). ICT diffusion, financial development, and economic growth: An international cross-country analysis. Economic Modelling, 94, 662-671.
Chien, M.S. et al. (2020). The non-linear relationship between ICT diffusion and financial development. Telecommunications Policy, 44(9), p. 102023.
Čihák, M. et al. (2013). Financial Development in 205 Economies, 1960 to 2010. Journal of Financial Perspectives, 1(2)), 17-36.
Consoli, D. (2012). Literature analysis on determinant factors and the impact of ICT in SMEs. Procedia-Social and Behavioral Sciences, 62, 93-97.
Domowitz, I. (2002). Liquidity, transaction costs, and reintermediation in electronic markets. Journal of Financial Services Research, 22(1), 141-157.
Driscoll, J.C. and Kraay, A.C. (1998). Consistent Covariance Matrix Estimation with Spatially Dependent Panel Data. The Review of Economics and Statistics, 80(4), 549-560.
Dutta, A. (2001). Telecommunications and economic activity: An analysis of Granger causality. Journal of Management Information Systems, 17(4), 71-95.
Ejemeyovwi, J.O. et al. (2021). ICT adoption, innovation and financial development in a digital world: Empirical analysis from Africa. Transnational Corporations Review, 13(1), 16-31.
González Páramo, J.M. (2017). Financial innovation in the digital age: Challenges for regulation and supervision. Revista de Estabilidad Financiera, 32, 9-37.
Gurley, J. and Shaw, E. (1960). Money in a Theory of Finance. Washington: Brookings.
Hair, J.F.J. et al. (1995). Multivariate Data Analysis (3rd Ed.). New York: Macmillan.
Hannig, A. and Jansen, S. (2010). Financial Inclusion and Financial Stability: Current Policy Issues. Asian Development Bank Institute. No. 259, Tokyo.
IMF. (2022). Access to Macroeconomic & Financial Data. https://data.imf.org/?sk=388DFA60-1D26-4ADE-B505-A05A558D9A42.
Kambil, A. and Short, J.E. (1994). Electronic integration and business network redesign: A roles-linkage perspective. Journal of Management Information Systems, 10(4), 59-83.
Kim, D.H. et al. (2010). Dynamic effects of trade openness on financial development. Economic Modelling, 27(1), 254-261.
Kumar, R.R. (2012). Exploring the interactive effects of remittances, financial development and ICT in Sub-Saharan Africa: An ARDL bounds approach. African Journal of Economic and Sustainable Development, 1(3), 214-242.
Kurniawati, M.A. (2020). ICT infrastructure, innovation development and economic growth: A comparative evidence between two decades in OECD countries. International Journal of Social Economics, 48(1), 141-158.
Lapavitsas, C. and Dos Santos, P.L. (2008). Globalization and contemporary banking: on the impact of new technology. Contributions to Political Economy, 27(1), 31-56.
Law, S.H. (2009). Trade openness, capital flows and financial development in developing economies. International Economic Journal, 23(3), 409-426.
Levine, R. (1997). Financial development and economic growth: Views and Agenda. Journal of Economic Literature, 35(2), 688-726.
Nguyen, C.P. and Lee, G.S. (2021). Uncertainty, financial development, and FDI inflows: Global evidence. Economic Modelling, 99, 1-10.
Nguyen Hoang Minh (2020). Financial development and innovation: Empirical evidence in some Southeast Asian countries. JABES, 2(31), 5-22.
Nguyen Hoang Minh (2021). The impact of innovation and financial development on CO2 emissions: Empirical evidence from ASIAN Countries. Journal of International Economics and Management, 2(31), 21-34.
Palvia, P., Baqir, N. and Nemati, H. (2018). ICT for socio-economic development: A citizens’ perspective. Information & Management, 55(2), 160-176.
Pierri, M.N. and Timmer, M.Y. (2020), Tech in Fin before Fintech: Blessing or Curse for Financial Stability? International Monetary Fund.
Porter, M.E. (1990). The competitive advonioge of notions. Harvard Business Review, 68(2), 73-93.
Riggins, F. and Weber, D. (2016). Exploring the impact of information and communication technology (ICT) on intermediation market structure in the microfinance industry. The African Journal of Information Systems, 8(3), 1-19.
Sahay, R., Čihák, M., N’Diaye, P. and Barajas, A. (2015). Rethinking Financial Deepening: Stability and Growth in Emerging Markets. Revista de Economía Institucional, 17(33), 73-107.
Schumpeter, J.A. (1947). Theoretical problems of economic growth. Journal of Economic History Supplement, 7(1), 1-9.
Svirydzenka, K. (2016). Introducing a New Broad-Based Index of Financial Development. International Monetary Fund.
Tchamyou, V.S. (2017). The role of knowledge economy in African business. Journal of the Knowledge Economy, 8(4), 1189-1228.
Toader, E., Firtescu, B.N., Roman, A. and Anton, S.G. (2018). Impact of information and communication technology infrastructure on economic growth: An empirical assessment for the EU countries. Sustainability, 10(10), p. 3750.
Vu, K., Hanafizadeh, P. and Bohlin, E. (2020). ICT as a driver of economic growth: A survey of the literature and directions for future research. Telecommunications Policy, 44(2), p. 101922.
Wooldridge, J.M. (2001), Econometric Analysis of Cross Section and Panel Data. Cambridge: The MIT Press.
Wooldridge, J.M. (2005). Fixed-Effects and Related Estimators for Correlated Random-Coefficient and Treatment-Effect Panel Data Models. The Review of Economics and Statistics, 87(2), 385-390.
World Bank. (2022). World Development Indicators.
Yousefi, A. (2011). The impact of information and communication technology on economic growth: evidence from developed and developing countries. Economics of Innovation and New Technology, 20(6), 581-596.
Zagorchev, A. et al. (2011). Financial development, technology, growth and performance: Evidence from the accession to the EU. Journal of International Financial Markets, Institutions and Money, 21(5), 743-759.
Zoroja, J. (2016). Impact of ICTs on innovation activities: Indication for selected European countries. Naše Gospodarstvo/Our Economy, 62(3), 39-51.