Does ICT Affect the Financial Development? The Syrian Evidence

  • 10 Jul 2021
  • Published Resarch - Business


Ibrahim Alnafrah, Rama Sultan, Roua Aldoumani, Sulaiman Mouselli

Published in

Journal of Service, Innovation and Sustainable Development, Volume 2, No. 1, 2021.


The digital revolution affects all economic aspects and the financial sector is not an exception. Despite the wide evidence on the influence of Information, Communication, and Technology (ICT) on the financial sector advancement, this topic has yet to be researched in Syria. We explore the effect of five proxies of ICT on financial development using multiple regression model for the period 2005 to 2017. We also conduct marginal effect analysis to identify the impact of penetration of mobile phones on the financial development with war and without it.  We find that there is a significant positive influence of the number of mobile subscribers on the financial development index in Syria. Our result is consistent with Alshubiri et al. (2019) who find that a positive and significant impact exists of fixed broadband on financial development in GCC countries. However, the number of telephone subscribers has insignificant effect of the Syrian financial development. The war seems to have a significant adverse effect on the financial development in Syria. In addition, we find that the marginal influence of mobile subscription on the index of financial development without war is larger compared to the case with war. We conclude that digital transformation has great potentials for advancing the Syrian financial sector especially if accompanied with more investment in ICT infrastructure.

Keywords: ICT, financial development, marginal effect analysis, mobile subscription, Syria.

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