Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Effect of financial technology on cash holding in Nigeria

Effect of financial technology on cash holding in Nigeria This paper aims to examine the effect of financial technology on cash holding in Nigeria.Design/methodology/approachThe authors use Pesaran et al.’s (2001) autoregressive distributed lag (ARDL) bounds test approach to cointegration to estimate the long-run relationship between four direct measures of financial technology (automated teller machine [ATM], Internet banking [IB], point of sale [POS] and mobile banking [MB]) and cash holding.FindingsThe authors find the presence of long-run negative relationship between cash holding and the four direct measures of financial technology.Practical implicationsDespite the negative effect of financial technology on cash holding, the descriptive results highlight increasing trajectory in cash holding. This suggests that structural factors such as ethical climate, literacy level, household characteristics, currency denomination structures, economic uncertainty and infrastructure deficit may account for the pervasive cash transactions in Nigeria and not necessarily the unwillingness of economic agents to use digital platform for financial transactions.Originality/valueThis study contributes to existing literature by augmenting the money demand function to accommodate direct measures of financial technology in examining the effectiveness of the policy on cash holding in Nigeria. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png African Journal of Economic and Management Studies Emerald Publishing

Loading next page...
 
/lp/emerald-publishing/effect-of-financial-technology-on-cash-holding-in-nigeria-q6A1DVTJ1n

References

References for this paper are not available at this time. We will be adding them shortly, thank you for your patience.

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
2040-0705
DOI
10.1108/ajems-04-2020-0190
Publisher site
See Article on Publisher Site

Abstract

This paper aims to examine the effect of financial technology on cash holding in Nigeria.Design/methodology/approachThe authors use Pesaran et al.’s (2001) autoregressive distributed lag (ARDL) bounds test approach to cointegration to estimate the long-run relationship between four direct measures of financial technology (automated teller machine [ATM], Internet banking [IB], point of sale [POS] and mobile banking [MB]) and cash holding.FindingsThe authors find the presence of long-run negative relationship between cash holding and the four direct measures of financial technology.Practical implicationsDespite the negative effect of financial technology on cash holding, the descriptive results highlight increasing trajectory in cash holding. This suggests that structural factors such as ethical climate, literacy level, household characteristics, currency denomination structures, economic uncertainty and infrastructure deficit may account for the pervasive cash transactions in Nigeria and not necessarily the unwillingness of economic agents to use digital platform for financial transactions.Originality/valueThis study contributes to existing literature by augmenting the money demand function to accommodate direct measures of financial technology in examining the effectiveness of the policy on cash holding in Nigeria.

Journal

African Journal of Economic and Management StudiesEmerald Publishing

Published: May 25, 2021

Keywords: Financial technology; Cash holding; Nigeria; ARDL; Income; Opportunity cost

References