nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2022‒03‒14
five papers chosen by

  1. How Materialism Shapes the Effectiveness of Financial Literacy Messages: A Cross‐Cultural Perspective By Jamel Khenfer
  2. Platform-based business models and financial inclusion By Karen Croxson; Jon Frost; Leonardo Gambacorta; Tommaso Valletti
  3. What Drives Financial Sector Development in Africa? Insights from Machine Learning By Isaac K. Ofori; Christopher Quaidoo; Pamela E. Ofori
  4. Peran Perguruan Tinggi Pesantren dalam Implementasi Literasi Ekonomi By Nugraha, Ahmad Lukman; Susilo, Adib; Rochman, Chaerul
  5. The Synergy between Governance and Economic Integration in Promoting Female Economic Inclusion in Sub-Saharan Africa By Pamela E. Ofori; Simplice A. Asongu; Vanessa S. Tchamyou

  1. By: Jamel Khenfer (Zayed University)
    Abstract: This cross-cultural experiment (N = 1,000) shows that messages designed to promote financial literacy are differently effective among U.S. and Arab consumers depending on the salience of materialistic thoughts at the time of exposure. Among U.S. consumers, financial literacy messages increased savings intention by heightening the importance of saving when materialistic thoughts were salient but had no impact otherwise. This is consistent with existing research which has largely focused on WEIRD countries (Western, Educated, Industrial, Rich, Democratic; Henrich, Heine, & Norenzayan, 2010). However, among Arab consumers (data collected in the United Arab Emirates), we found that financial optimism was a key construct to explain savings behaviors. Specifically, our results show that financial literacy messages lower levels of financial optimism, and thus, increase savings intention at baseline levels. When materialistic thoughts are salient, our results suggest that Arab consumers prefer spending in the presence of financial literacy messages because having materialistic thoughts heightens financial optimism when one is assured that acquiring financial knowledge and skills guarantees one's financial success.
    Keywords: Arab,cross-cultural,financial literacy,financial optimism,materialism,saving,Middle East,non-WEIRD population
    Date: 2022–01–10
  2. By: Karen Croxson; Jon Frost; Leonardo Gambacorta; Tommaso Valletti
    Abstract: Three types of digital platforms are expanding in financial services: (i) fintech entrants; (ii) big tech firms; and (iii) increasingly, incumbent financial institutions with platformbased business models. These platforms can dramatically lower costs and thereby aid financial inclusion – but these same features can give rise to digital monopolies and oligopolies. Digital platforms operate in multi-sided markets, and rely crucially on big data. This leads to specific network effects, returns to scale and scope, and policy trade-offs. To reap the benefits of platforms while mitigating risks, policy makers can: (i) apply existing financial, antitrust and privacy regulations, (ii) adapt old and adopt new regulations, combining an activity and entity-based approach, and/or (iii) provide new public infrastructures. The latter include digital identity, retail fast payment systems and central bank digital currencies (CBDCs). These public infrastructures, as well as ex ante competition rules and data portability, are particularly promising. Yet to achieve their policy goals, central banks and financial regulators need to coordinate with competition and data protection authorities.
    Keywords: financial inclusion, fintech, big tech, platforms
    JEL: E51 G23 O31
    Date: 2021–12
  3. By: Isaac K. Ofori (University of Insubria, Varese, Italy); Christopher Quaidoo (Legon, Accra, Ghana); Pamela E. Ofori (University of Insubria, Varese, Italy)
    Abstract: This study uses machine learning techniques to identify the key drivers of financial development in Africa. To this end, four regularization techniques— the Standard lasso, Adaptive lasso, the minimum Schwarz Bayesian information criterion lasso, and the Elasticnet are trained based on a dataset containing 86 covariates of financial development for the period 1990 – 2019. The results show that variables such as cell phones, economic globalisation, institutional effectiveness, and literacy are crucial for financial sector development in Africa. Evidence from the Partialing-out lasso instrumental variable regression reveals that while inflation and agricultural sector employment suppress financial sector development, cell phones and institutional effectiveness are remarkable in spurring financial sector development in Africa. Policy recommendations are provided in line with the rise in globalisation, and technological progress in Africa.
    Keywords: Africa, Elasticnet, Financial Development, Financial Inclusion, Lasso, Regularization, Variable Selection
    JEL: C01 C14 C52 C53 C55 E5 O55
    Date: 2021–01
  4. By: Nugraha, Ahmad Lukman; Susilo, Adib; Rochman, Chaerul
    Abstract: This study aims to determine the role of Islamic boarding schools in the application of economic literacy. The research method used is descriptive qualitative. The object of this research is Darussalam Gontor University. The results of this study indicate that Islamic boarding schools in implementing economic literacy carry out several functions; 1) as an educational institution that changes the economic orientation of the community which was originally intended to satisfy wants, to become "sufficient" by meeting needs, 2) as an educational institution that changes a consumptive lifestyle into a moderate lifestyle, 3) as an educational institution that frames human economic activities in the framework of ta'abbudi (worship) which was originally limited to the framework of meeting physical needs, 4) as an educational institution that changes its profit and utility orientation, to an orientation to maximize maslahah, 5) as an educational institution that applies forced learning methods, and finally could be because they are used to it, 6) as an educational institution that applies economic literacy not limited to academic aspects, but non-academic aspects
    Date: 2021–12–24
  5. By: Pamela E. Ofori (Varese, Italy); Simplice A. Asongu (Yaoundé, Cameroon); Vanessa S. Tchamyou (Yaoundé, Cameroon)
    Abstract: The debate on the need for Sub-Saharan African (SSA) countries to increase female participation in the economic sector has intensified the coming into force of the African Continental Free Trade Area (AfCFTA) and good governance. This study investigates the joint effects of governance (comprising of political, economic and institutional governance) and economic integration on female economic participation in sub-Saharan Africa (SSA). The study employs panel data of 42 countries in SSA spanning 1996-2020 for the analysis. The empirical strategy uses the dynamic System Generalized Method of Moments (SGMM) estimation technique. The findings reveal that the single effect of economic integration on female economic participation is necessary but not sufficient. Hence, complementing economic integration with good governance further enhances female economic participation in SSA. In general, the joint effect of economic integration and good governance should be a concern for policymakers to promote female economic inclusion.
    Keywords: economic integration; governance; female economic participation; sub-Saharan Africa
    JEL: G20 I10 I32 O40 O55
    Date: 2021–01

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