Epidemic Exposure, Fintech Adoption, and the Digital Divide

42 Pages Posted: 20 Jul 2021

See all articles by Orkun Saka

Orkun Saka

City, University of London; London School of Economics; Systemic Risk Centre & STICERD; CESifo Network

Barry Eichengreen

University of California, Berkeley; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Cevat Giray Aksoy

European Bank for Reconstruction and Development; King’s College London; IZA Institute of Labor Economics

Multiple version iconThere are 3 versions of this paper

Date Written: 2021

Abstract

We ask whether epidemic exposure leads to a shift in financial technology usage within and across countries and if so who participates in this shift. We exploit a dataset combining Gallup World Polls and Global Findex surveys for some 250,000 individuals in 140 countries, merging them with information on the incidence of epidemics and local 3G internet infrastructure. Epidemic exposure is associated with an increase in remote-access (online/mobile) banking and substitution from bank branch-based to ATM-based activity. Using a machine-learning algorithm, we show that heterogeneity in this response centers on the age, income and employment of respondents. Young, high-income earners in full-time employment have the greatest propensity to shift to online/mobile transactions in response to epidemics. These effects are larger for individuals in subnational regions with better ex ante 3G signal coverage, highlighting the role of the digital divide in adaption to new technologies necessitated by adverse external shocks.

JEL Classification: G200, G590, I100

Suggested Citation

Saka, Orkun and Eichengreen, Barry and Aksoy, Cevat Giray, Epidemic Exposure, Fintech Adoption, and the Digital Divide (2021). CESifo Working Paper No. 9173, Available at SSRN: https://ssrn.com/abstract=3885416 or http://dx.doi.org/10.2139/ssrn.3885416

Orkun Saka (Contact Author)

City, University of London ( email )

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London School of Economics

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Systemic Risk Centre & STICERD

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Barry Eichengreen

University of California, Berkeley ( email )

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National Bureau of Economic Research (NBER)

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Cevat Giray Aksoy

European Bank for Reconstruction and Development ( email )

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King’s College London ( email )

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IZA Institute of Labor Economics ( email )

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