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The Role of Information and Communication Technology (ICT) and FDI on South African Economic Growth

Author

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  • Thomas HABANABAKIZE

    (Tshwane University of Technology, South Africa)

  • Mulatu ZERIHUN

    (Tshwane University of Technology, South Africa)

Abstract

Information, communication, technology (ICT) and foreign direct investment plays a substantial role in various spheres of social and economic development. Therefore, changes in these variables can significantly impact a country’s economy. The current study aims to assess the implication of information and communication technology (ICT) and FDI on South African economic growth. To achieve this objective, the autoregressive distributed lag (ARDL) model and Error Correction Model (ECM) were applied to time series data over the period 1991 to 2021. Findings obtained from econometric modelling and analysis indicate that besides the positive effect of FDI on South African economic growth, all the analysed components of ICT namely mobile phone subscriptions, fixed phones, and internet subscriptions are drivers of economic growth in South Africa. Based on the findings, from the policy perspective, it was suggested that South African economic authorities increase and improve investment in the ICT infrastructure while also attracting more foreign investors. Additionally, to benefit from FDI and ICT’s drivers of economics, policymakers should endorse policies and strategies that enhance economic openness and the ICT’s resource allocation.

Suggested Citation

  • Thomas HABANABAKIZE & Mulatu ZERIHUN, 2024. "The Role of Information and Communication Technology (ICT) and FDI on South African Economic Growth," Management and Economics Review, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 9(3), pages 413-426, October.
    • Handle: RePEc:rom:merase:v:9:y:2024:i:3:p:413-426
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    References listed on IDEAS

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    More about this item

    Keywords

    digitalisation; economic growth; FDI; ICT; South Africa.;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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