INFORMATION MANAGEMENT SYSTEM ADOPTION AND EXTERNAL SECTOR STABILITY IN DEVELOPING COUNTRIES

Abstract

The association between the adoption of the information management system and external sector stability in developing countries was explored and institutional quality was used as a moderating variable. The dimensions of information management system (IMS) adoption that were examined in the study are digital governance adoption, financial information system (FIS) integration, and data protection stability, while balance of payments stability, adequacy of foreign reserves, and external debt sustainability act as measures of external sector stability. Research design used in the study was quantitative and was of correlational design with both the primary and secondary data sources. A sample of 30 developing countries in Africa, Asia and Latin America was purposively selected based on a consideration of data availability and relevance to the study objectives. Secondary data was sourced from the World Bank Development Indicators (WDI), International Monetary Fund (IMF), United Nations Conference on Trade and Development (UNCTAD), Worldwide Governance Indicators (WGI), International Telecommunication Union (ITU) and Global FinTech database for the year 2015-2024. The data collected were primary data that was obtained from structured questionnaires given to Financial analysts, ICT professionals, banking officials, policy makers and public sector administrators. A total of 300 questionnaires were sent out and 250 valid replies received and analysed. Descriptive statistics, Pearson Product Moment Correlation Coefficient (PPMC) and multiple regression analysis were used in analyzing the data with the use of SPSS version 26.0. The results showed that digital governance adoption had significant positive relationship with balance of payments stability (at the level of p=0.002), financial information system integration significantly changed foreign reserve adequacy (at the level of p=0.000) and data protection stability significantly changed external debt sustainability (at the level of p=0.000). The study also showed that the institution quality was found to be a significant moderator between information management system adoption and external sector stability (r = 0.643, p = 0.000). The study found that adoption of the information management system has significant positive impacts on external sector stability in developing countries and that institutional quality enhances the role of using information management system in improving external sector results with respect to digital governance, financial information system and data protection mechanism. In order to create sustainable external sector stability and macroeconomic development, the study recommended governments and financial institutions to better develop their digital governance system, to support financial information system integration, to improve cybersecurity infrastructure and to improve the quality of institutions.