Abstract
<title>Abstract</title> <p>This study examines the effect of technology adoption on financial sector development in Liberia, a small, dual-currency, post-conflict economy in which the banking system has expanded markedly since the mid-2000s. Situating the analysis within the institutional structure of Liberia’s formal and informal financial sectors — commercial banking, mobile money, agent banking, microfinance, insurance, and rural community finance institutions — the study estimates the long-run relationship between two indicators of technology adoption (mobile cellular subscriptions and internet penetration) and two proxies of financial sector development (net domestic credit and broad money supply, M2) using annual data for Liberia over 1991–2021. An Autoregressive Distributed Lag (ARDL) bounds-testing approach confirms the existence of a cointegrating relationship for both financial development proxies. In the long run, mobile cellular subscriptions and internet penetration are positively and significantly associated with both net domestic credit and broad money supply, alongside positive long-run effects of GDP growth and lending interest rates. These findings indicate that, over time, expanding mobile and internet access has been associated with a deeper and more liquid financial system in Liberia, consistent with the country’s observed institutional trajectory of branch expansion, mobile money uptake, and payments-system modernization. The paper discusses these results against Liberia’s financial-sector institutional record and derives policy implications for infrastructure investment and telecommunications regulation.</p>