THE INFLUENCE OF THE INTERNET ON EXPORT PERFORMANCE SUB-SAHARA AFRICA

Mabintu Mansaray and Han Bin Jia
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Mabintu Mansaray: Liaoning Technical University, China.
Han Bin Jia: Liaoning Technical University, China.

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Abstract: With the used of panel-country level export data, this paper investigates the impact of the internet on export performance in 41(Sub-Sahara Africa countries). With the internet being measured on two fundamentals aspect email and website, the econometrics result from both the Random effect Ordinary Least Square regression (OLS) model and Pooled estimate concluded that the internet is efficiently an important tool to promote export performance. Further diagnostic test using the GMM Generalize Method of Moment to test for endogeneity problem signifies all variables used have a significant effect on export performance with giving more validation of the data indicating the absence of endogeneity. The empirical analysis allows us to take into consideration of Self-Selection biased on the reason for some firms weak export performance, which was due to their geographical locations creating a higher cost on the flow of weak Internet penetration. Therefore, the research concludes that firms with higher internet penetration are more likely to use email in promoting their export performance by 23% than firms that do not. With geographical location, which is seen as a natural phenomenon being sighted as the main problem towards inefficient internet penetration leading to higher cost, it is recommended that government policies are the best to mitigating this problem, that is, formulating a solid policies for those oligopolistic behavior of some large submarine cable operators that makes prices very high for connectivity and that government should also enforce quality investment into internet infrastructure to disrate the weight of firms marginal cost.

Date: 2017-07-01
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Published in Journal of Economics, Management and Trade, 2017, 2 (1), pp.44-49

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05363988

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