STEG Working Paper

Mobile Internet Adoption and Inclusive Structural Change: Evidence from Nigerian Non-Farming Enterprises

Bernardo Caldarola

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This paper investigates the impact of mobile internet adoption on micro-level structural change and inclusion in Nigeria. Using the case of Nigerian non-farming household enterprises (NFEs), the paper examines how the adoption of mobile internet affect structural change at the micro level, measured in terms of NFE sales per worker, household sectoral transitions, and labour shifts from the household towards the market; and inclusion, measured by the creation of job creation and entrepreneurial opportunities. The analysis combines a panel dataset of Nigerian households (2010-2015) with district level data from the GSMA mobile internet coverage maps. A mobile adoption measure is constructed to estimate its effect on the labour productivity, employment, sector transition, and firm entry. As the roll-out of mobile internet is unlikely to be entirely random, the study adopts an identification strategy that uses the variation of lightning strikes in Nigerian districts, along with an event study approach. Findings indicate that mobile internet adoption bolsters NFE labour productivity, mainly in services. However, this effect is driven by growth in sales and a reduction in labour required by household enterprises, although NFE-owning households are able to reallocate excess labour outside the household. Entry into manufacturing is discouraged and firm entry is not facilitated, neither are households protected against market exit.

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