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ICT diffusion and the finance–growth nexus: a panel analysis on ECOWAS countries

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  • Ahmed S. Alimi

    (Obafemi Awolowo University)

  • Idris A. Adediran

    (Obafemi Awolowo University
    University of Ibadan)

Abstract

In this study, we rely on the extension of the endogenous growth theory to consider the role of ICT diffusion in the finance–growth nexus theoretically informed via the supply-leading and demand-following theses. Motivated by current realities highlighting the significance of information and communication technologies (ICTs) to modern societies, the study evaluates the foregoing research objective in ECOWAS countries over the 2005–2016 period based on the justification of the ICT diffusion into the ECOWAS region around the early 2000s. Innovatively, the study constructs an ICT diffusion index covering fixed telephone lines, mobile cellular subscription and Internet penetration as relevant media for ICT dispersion. We adopt the pooled mean group estimator on a dynamic panel ARDL model for robust analysis of the subject matter. We find that financial development (its main and alternative measure) alone inhibits growth of ECOWAS countries, but its interaction with ICT diffusion promotes economic growth in the region. The implication of our research findings for the West African region is that financial sector development efforts have to be strengthened by investment in ICT infrastructure, improved Internet penetration and further integration of electronic finance policies.

Suggested Citation

  • Ahmed S. Alimi & Idris A. Adediran, 2020. "ICT diffusion and the finance–growth nexus: a panel analysis on ECOWAS countries," Future Business Journal, Springer, vol. 6(1), pages 1-10, December.
    • Handle: RePEc:spr:futbus:v:6:y:2020:i:1:d:10.1186_s43093-020-00024-x
    DOI: 10.1186/s43093-020-00024-x
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    Cited by:

    1. Mugabe Roger & Liu Shulin & Brima Sesay, 2022. "ICT Development, Innovation Diffusion and Sustainable Growth in Sub-Saharan Africa," SAGE Open, , vol. 12(4), pages 21582440221, October.
    2. IWASAKI, Ichiro & ONO, Shigeki, 2023. "Economic Development and the Finance-Growth Nexus : A Meta-Analytic Approach," CEI Working Paper Series 2023-06, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    3. Anushka Verma & Arun K. Giri & Byomakesh Debata, 2023. "Does ICT diffusion reduce poverty? Evidence from SAARC countries," Poverty & Public Policy, John Wiley & Sons, vol. 15(1), pages 8-28, March.

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    More about this item

    Keywords

    ICTs; Financial development; Economic growth; ECOWAS; PMG estimator;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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