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The Role of Telecommunication Infrastructure in the Regional Economic Growth of Africa

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  • Enowbi Batuo, Michael
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    Abstract

    This paper deals with the effects of telecommunications on the economic growth in African countries. The telecommunications sector became a vital sector during the era of the economic reform that has been characterising the continent. We investigate empirically the role of telecommunication infrastructures on long-run economic growth in African countries, for the span of time from 1984 to 2005. We use the panel data approach with a dynamic fixed effect model, which evidences that telecommunications contribute in a major way to the economic development of the continent. It is a crucial determinant, as findings indicate a significant and positive correlation between telecommunication infrastructures and regional growth in Africa, after controlling for a number of other factors. Results also show that investment in telecommunications is subject to diminishing returns.

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    Bibliographic Info

    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 12431.

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    Date of creation: 22 Jun 2008
    Date of revision: 07 Oct 2008
    Handle: RePEc:pra:mprapa:12431

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    Keywords: Infrastructure; Growth; Africa; Panel;

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    1. Levine, Ross & Renelt, David, 1991. "A sensitivity analysis of cross-country growth regressions," Policy Research Working Paper Series 609, The World Bank.
    2. J. Bradford De Long & Lawrence H. Summers, . "Equipment Investment and Economic Growth," J. Bradford De Long's Working Papers _122, University of California at Berkeley, Economics Department.
    3. Robert J. Barro, 1989. "Economic Growth in a Cross Section of Countries," NBER Working Papers 3120, National Bureau of Economic Research, Inc.
    4. Röller, Lars-Hendrik & Waverman, Leonard, 2000. "Telecommunications Infrastructure And Economic Development: A Simultaneous Approach," CEPR Discussion Papers 2399, C.E.P.R. Discussion Papers.
    5. Anusua Datta, 2003. "Divestiture and Its Implications for Innovation and Productivity Growth in U.S. Telecommunications," Southern Economic Journal, Southern Economic Association, vol. 69(3), pages 644-558, January.
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    7. David Aschauer, 1988. "Is public expenditure productive?," Staff Memoranda 88-7, Federal Reserve Bank of Chicago.
    8. Wolff, Edward N, 1991. "Capital Formation and Productivity Convergence over the Long Term," American Economic Review, American Economic Association, vol. 81(3), pages 565-79, June.
    9. Islam, Nazrul, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, MIT Press, vol. 110(4), pages 1127-70, November.
    10. Hardy, Andrew P., 1980. "The role of the telephone in economic development," Telecommunications Policy, Elsevier, vol. 4(4), pages 278-286, December.
    11. Holtz-Eakin, Douglas, 1994. "Public-Sector Capital and the Productivity Puzzle," The Review of Economics and Statistics, MIT Press, vol. 76(1), pages 12-21, February.
    12. Wellenius, Björn, 1977. "Telecommunications in developing countries," Telecommunications Policy, Elsevier, vol. 1(4), pages 289-297, September.
    13. Cronin, Francis J. & Parker, Edwin B. & Colleran, Elisabeth K. & Gold, Mark A., 1991. "Telecommunications infrastructure and economic growth : An analysis of causality," Telecommunications Policy, Elsevier, vol. 15(6), pages 529-535, December.
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