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Epidemic Exposure, Financial Technology, and the Digital Divide

Saka, O. ORCID: 0000-0002-1822-1309, Eichengreen, B. & Aksoy, C. G. (2022). Epidemic Exposure, Financial Technology, and the Digital Divide. Journal of Money, Credit and Banking,

Abstract

We ask whether epidemic exposure leads to a shift in financial technology usage and 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 activity. The temporary nature of the effects we identify is more consistent with a demand channel rather than that of supply with high initial fixed costs. Exploring heterogeneity using a machine-learning driven approach, we find that young, high-income earners in full-time employment have the greatest tendency to shift to online/mobile transactions in response to epidemics. Baseline effects are larger for individuals with better ex ante 3G signal coverage, highlighting the role of the digital divide in adaption to new technologies necessitated by adverse external shocks.

Publication Type: Article
Additional Information: This is the peer reviewed version of the following article: Saka, O. , Eichengreen, B. & Aksoy, C. G. (2022). Epidemic Exposure, Financial Technology, and the Digital Divide. Journal of Money, Credit and Banking, which has been published in final form at http://onlinelibrary.wiley.com/journal/10.1111/(ISSN)1538-4616. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited.
Publisher Keywords: epidemics; fintech; banking
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HJ Public Finance
Q Science > QA Mathematics > QA75 Electronic computers. Computer science
Departments: School of Arts & Social Sciences > Economics
[img] Text - Accepted Version
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