Nexus between telecommunication infrastructures, economic growth and development in Africa: Panel vector autoregression (P-VAR) analysis

Oladipo David

Telecommunications Policy, 2019, vol. 43, issue 8, -

Abstract: This study examines the causal-effect relationship between telecommunication infrastructures, economic growth and development in selected African countries. It further estimates the trivariate impacts of telecommunication infrastructures, economic growth and development in the region. The analysis considers a panel of forty-six African countries from 2000 to 2015. To measure economic growth, real gross domestic product serves as the proxy, while economic development is measured by the Human Development Index, and telecommunication infrastructures by a composite index of telecommunication computed from mobile line, fixed line and internet access penetration via principal component analysis (PCA). The empirical results suggest the existence of a bidirectional long-run relationship between telecommunication infrastructures, economic growth and development. The causality tests reveal that there is feedback causality between telecommunication infrastructures, economic growth and development. Telecommunication infrastructures promote economic growth and development in Africa and vice versa. Thus, there is need to promote inclusive and holistic policies that will enhance digital provide, economic growth and development simultaneously in Africa. An increase in telecommunication infrastructures will encourage aggregate output and standard of living to move in the same direction in Africa.

Keywords: Telecommunication infrastructures; Economic growth-development; Panel causality; Principal component analysis (PCA); Variance decomposition and impulse response analysis (search for similar items in EconPapers)
JEL-codes: C20 C23 C38 L96 O10 O40 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (36)

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DOI: 10.1016/j.telpol.2019.03.005

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