An Assessment of the Effect of Telecommunication Investment on Economic Growth in West Africa

Nazifi Abdullahi Darma and Muhammad Ali

Journal of Empirical Economics, 2016, vol. 5, issue 3, 153-162

Abstract: The study is an empirical assessment of the effect of telecommunication investment on economic growth in West Africa covering the period 2001-2013, and using panel data from various secondary sources. The generalized method of moments (GMM) model, and granger causality tests were applied in the study. The dependent variable is real per capita GDP while the independent variables are telecommunication investment, lag value of real per capita GDP, gross fixed investment and Foreign Direct Investment (FDI). The findings based on the adopted GMM model revealed that telecommunication and foreign direct investments have positive but not significant effect on economic growth while gross fixed investment and lag value of GDP are significantly related to growth. The Granger causality results showed bidirectional relationship between GDP and telecommunication investment while unidirectional causality runs from investment to GDP, and no causality exists between GDP and FDI. The study therefore recommended among others, the need for sustenance and enhancement of liberalization policy to encourage more investment in the telecommunication sector, and strengthening of reform aimed at deregulation and privatization of the sector, and improving access to telecommunication services in the rural areas with sound regulatory institution to enhance business environment and service delivery.

Keywords: telecommunication investment; economic growth (search for similar items in EconPapers)
Date: 2016
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