Information and Communication Technology (ICT), Growth and Development in Developing Regions: Evidence from a Comparative Analysis and a New Approach

Charles Shaaba Saba (), Nicholas Ngepah () and Nicholas Odhiambo
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Charles Shaaba Saba: University of Johannesburg
Nicholas Ngepah: University of Johannesburg

Journal of the Knowledge Economy, 2024, vol. 15, issue 3, No 171, 14700-14748

Abstract: Abstract The majority of empirical literature acknowledges that information and communication technology (ICT) has a favourable effect on economic growth/development. Different studies, however, contend that this impact is modest or perhaps null, yielding inconsistent findings. In view of this complication, we therefore conducted a study with the aim to analyse the ICT diffusion-economic growth-development nexus for 73 countries over the period 2000–2018. The panel data was divided into three regions, namely sub-Saharan Africa (SSA), the Middle East and North Africa (MENA), and Latin America and the Caribbean (LAAC). For the analysis, the newly developed panel vector autoregression (PVAR) in the generalised method of moments (GMM) estimation approach was applied. Our findings suggest a long-run equilibrium relationship between the three variables. The findings differ from the causality results for the overall panel and each of the regions differs. The inconsistency in the causality results across the regions suggests that the level of ICT diffusion is still underdeveloped. The PVAR-GMM results reveal that (i) ICT diffusion is a significant and positive predictor of growth across the regions, with a greater effect reported in MENA; (ii) ICT diffusion is a significant and positive predictor of development across the regions with a lesser effect noticed in MENA. The study’s implication for academia and practice is that (i) it provides important information on the ICT diffusion-economic growth-development nexus within the context of the econometric approaches used, and (ii) policymakers and managers of telecom businesses should accommodate sufficient support to further establish the ICT infrastructures and expand its penetration for all round sustainable and inclusive growth and development purposes.

Keywords: ICT diffusion; Economic growth and development; Panel cointegration and causality; Regional groupings (search for similar items in EconPapers)
JEL-codes: O1 O33 O47 O53 O54 O55 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s13132-023-01571-8

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