Mobile Infrastructure and Rural Business Enterprises : Evidence from SIM Registration Mandate in Niger
Business enterprises and non-agricultural startups in rural economies play crucial roles in ending the vicious cycle of poverty. The propagation of business enterprises are, however, subject to a high degree of institutional frictions and vacuums e...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2017
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/186391513608326487/Mobile-infrastructure-and-rural-business-enterprises-evidence-from-sim-registration-mandate-in-Niger http://hdl.handle.net/10986/29069 |
| Summary: | Business enterprises and
non-agricultural startups in rural economies play crucial
roles in ending the vicious cycle of poverty. The
propagation of business enterprises are, however, subject to
a high degree of institutional frictions and vacuums e.g.,
information; but mobile infrastructure which has the
externality of flowing information can help overcome most of
these vacuums through reduced fixed costs, lower cost of
information or search, and outreach to a broader customer
base. This paper studies the effects of mobile
infrastructure ("mobile use activity") on
propagation of rural business enterprises in Niger.
Instrumental variable estimates exploit the exogenous
introduction of the 2013 national mandatory SIM registration
reform which provides a quasi-experimental set-up for mobile
use and activity. The mandate deactivated about one-third of
all existing prepaid SIMs and led to a remarkable decline in
mobile use activity. The results suggest that there is
economically substantial effect of mobile infrastructure on
propagation of business enterprises. Moving a household with
mobile use activity to a no mobile use activity environment
due to SIM deactivation results in roughly 33.1 percent
points decline in the likelihood of engaging in
non-agricultural business enterprises. Most of this effect
come from three major sources: households' ownership of
a business service or center; ownership of small income
generating activities; and involvement in the transformation
of agricultural products. There is suggestive evidence that
the reform's impact is disproportionately larger for
women. With the expansion of mandatory SIM registration
reforms in developing countries, the findings have extended
implications in these contexts. |
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