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Nexus between telecommunication infrastructures, defence and economic growth: a global evidence

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  • Charles Shaaba Saba

    (University of Johannesburg)

  • Nicholas Ngepah

    (University of Johannesburg)

Abstract

This study applies the recently developed novel panel vector autoregression models in a generalized method of moments (GMM) estimation framework to investigate the telecommunication infrastructures-defence-growth nexus for 157 countries between 2000 and 2018. To measure the defence sector, defence spending serves as the proxy, while economic growth is measured by the real gross domestic product, and telecommunication infrastructures are measured by a composite index of telecommunication (which comprises of mobile line, fixed line, and internet access penetration) via the principal component method. The empirical results at the global level show that telecommunication infrastructures, defence spending and growth jointly cause one another, while the direction of their effects differs. The direction of the causal-effect among the three variables for the income groups also differ. Thus, there is need to promote holistic policies that will reduce defence spending necessary for the enhancement of telecommunication infrastructures and inclusive economic growth at the global level, low-, upper-middle and high-income countries. A decrease in the allocation of funds to the defence sector will encourage enhancement of telecommunication infrastructures and aggregate output to move in the same direction.

Suggested Citation

  • Charles Shaaba Saba & Nicholas Ngepah, 2022. "Nexus between telecommunication infrastructures, defence and economic growth: a global evidence," Netnomics, Springer, vol. 22(2), pages 139-177, October.
  • Handle: RePEc:kap:netnom:v:22:y:2022:i:2:d:10.1007_s11066-022-09151-9
    DOI: 10.1007/s11066-022-09151-9
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    2. Fedajev, Aleksandra & Mitić, Petar & Kojić, Milena & Radulescu, Magdalena, 2023. "Driving industrial and economic growth in Central and Eastern Europe: The role of electricity infrastructure and renewable energy," Utilities Policy, Elsevier, vol. 85(C).

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    Keywords

    telecommunication infrastructures; defence spending; economic growth; panel-vector autoregressive (PVAR); income groupings;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

    Statistics

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    Corrections

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