Mobile money and business performance in the ECOWAS region: the role of the innovation ecosystem

This article examines the impact of mobile money on the labour productivity of firms in nine ECOWAS countries. Using propensity score matching and inverse probability-weighted regression adjustment, we find that firms using mobile money are more productive than those that do not. This result remains robust to endogeneity concerns. Heterogeneity analyses reveal that SMEs benefit from mobile money adoption, whereas large firms do not. Furthermore, we find that mobile money has a positive and significant effect on the productivity of service firms but not that of manufacturing firms. Further investigations reveal that mobile money adoption contributes to firms’ performance, particularly in countries with a relatively mature innovation ecosystem, albeit with important nuances. SMEs and service businesses benefit from the adoption of mobile money regardless of the maturity level of the innovation ecosystem. In contrast, large businesses and manufacturing businesses gain nothing from mobile money in contexts where the innovation ecosystem is underdeveloped. These findings highlight the importance for policy makers of strengthening the innovation ecosystem, including by promoting the interoperability of payment systems, removing barriers to mobile money adoption by businesses, and improving and harmonising regulations to foster national and regional interoperability. Lastly, it is important that policies targeting businesses are size and sector specific.

KEYWORDS: Mobile money, labour productivity, innovation ecosystem

Link: https://www.tandfonline.com/doi/full/10.1080/00036846.2025.2581328