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The Impact of ICT Investment and Diffusion on Economic Growth: Empirical Evidence from Rwanda

Author

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  • MUGABE Roger

    (School of Economics, Wuhan University of Technology, Wuhan, China)

  • Liu Shulin

    (School of Economics, Wuhan University of Technology, Wuhan, China)

  • Byringiro Enock

    (School of Economics and Business studies, Kigali Independent University ULK, Kigali, Rwanda)

Abstract

This study evaluates the influence of Information and Communication Technologies (ICT) investment and diffusion on Rwanda’s economic growth. At the level we recommend, ICT imports greatly improve intermediate inputs to capital goods, resulting in increased economic growth. We use the most recent available data on technical innovation and investment for our empirical study, which spans the years 2005Q1 to 2020Q4. The results of regression analysis show that ICT development has little effect on Rwanda’s economic growth. However, we notice a patchwork of information on ICT investment. We utilize ICT goods exports and imports as a proxy for ICT investment, based on previous research. Surprisingly, ICT goods exports have had no impact on Rwanda’s economic growth. We do notice, however, that a 1% increase in ICT goods imports boosts economic growth by 3.9 percent. At this level, ICT goods import greatly boost the intermediate input to capital goods, resulting in increased economic growth. As a result, officials should ensure that ICT goods imports should be prioritized through supporting ICT investment to boost economic growth.

Suggested Citation

  • MUGABE Roger & Liu Shulin & Byringiro Enock, 2021. "The Impact of ICT Investment and Diffusion on Economic Growth: Empirical Evidence from Rwanda," International Journal of Innovation and Economic Development, Inovatus Services Ltd., vol. 7(4), pages 23-36, October.
    • Handle: RePEc:mgs:ijoied:v:7:y:2021:i:4:p:23-36
    DOI: 10.18775/ijied.1849-7551-7020.2015.74.2002
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    Cited by:

    1. Hoda Mansour, 2022. "The impact of ICT capital growth on economic growth: the case of Egypt," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 40(2), pages 375-394.

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    More about this item

    Keywords

    ICT investment; ICT diffusion; Economic growth; Rwanda;
    All these keywords.

    JEL classification:

    • M00 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General - - - General

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