Mobile Phone Innovation and Entrepreneurship in Sub-Saharan Africa

African Governance and Development Institute WP/17/023

36 Pages Posted: 26 Jun 2017

See all articles by Simplice Asongu

Simplice Asongu

African Governance and Development Institute

Nicholas Biekpe

University of Cape Town (UCT)

Date Written: May 4, 2017

Abstract

This study assesses how knowledge diffusion modulates the effect of the mobile phone on entrepreneurship in Sub-Saharan Africa with data for the period 2000-2012.The empirical evidence is based on interactive Generalised Method of Moments in which mobile phones are interacted with three knowledge diffusion variables, namely: education, internet penetration and scientific output. Ten variables of entrepreneurship are used. The following three main findings are established. First, the net effects from interacting mobile phones with the internet and scientific publications are negative whereas the corresponding net impact from the interaction between mobile phones and education is positive on the cost of doing business. Second, the mobile phone interacts with education (the internet) to have a positive (negative) net effect on the time needed to construct a warehouse whereas, the corresponding interaction with the internet yields a net negative effect on the time to enforce a contract. Third, there is a positive net effect from the interaction of mobile phones with education on the time to start a business. Given the construction of the education variable, the positive net effects from education are consistent with corresponding negative net effects from the other knowledge diffusion variables. The main policy implication is that mobile phone innovation (by means of internet penetration, scientific output and quality education) decreases constraints of entrepreneurship. Suggestions on how to boost these knowledge diffusion channels are discussed. Other practical and theoretical implications are also covered. To the best our knowledge, this is the first inquiry to assess the relevance of mobile phone innovation in entrepreneurship in Sub-Saharan Africa.

Keywords: Entrepreneurship; The Mobile Phone; Knowledge Diffusion; Sub-Saharan Africa

JEL Classification: L59; L98; O10; O30; O55

Suggested Citation

Asongu, Simplice and Biekpe, Nicholas, Mobile Phone Innovation and Entrepreneurship in Sub-Saharan Africa (May 4, 2017). African Governance and Development Institute WP/17/023. Available at SSRN: https://ssrn.com/abstract=2992459 or http://dx.doi.org/10.2139/ssrn.2992459

Simplice Asongu (Contact Author)

African Governance and Development Institute ( email )

P.O. Box 8413
Yaoundé, 8413
Cameroon

Nicholas Biekpe

University of Cape Town (UCT) ( email )

Private Bag X3
Rondebosch, Western Cape 7701
South Africa

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