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Foreign Direct Investment, Information Technology and Total Factor Productivity Dynamics in Sub-Saharan Africa

Author

Listed:
  • S.A. Asongu

    (University of South Africa)

  • N.M. Odhiambo

    (University of South Africa)

Abstract

Compared to other regions of the world, the potential for information technology penetration in sub-Saharan Africa (SSA) is very high. Unfortunately, productivity levels in the region are also very low. This study investigates the importance of information technology in influencing the effect of foreign direct investment (FDI) on total factor productivity (TFP) dynamics. The focus is on 25 countries in SSA. Information technology is measured with mobile phone penetration and internet penetration, while the engaged TFP productivity dynamics are TFP, real TFP, welfare TFP, and real welfare TFP. The empirical evidence is based on the Generalised Method of Moments. The findings show that, with the exception of regressions pertaining to real TFP growth for which the estimations do not pass post-estimation diagnostic tests, it is apparent that information technology (i.e. mobile phone penetration and internet penetration) modulate FDI to positively influence TFP dynamics (i.e. TFP, welfare TFP, and welfare real TFP). Policy and theoretical implications are discussed.

Suggested Citation

  • S.A. Asongu & N.M. Odhiambo, 2022. "Foreign Direct Investment, Information Technology and Total Factor Productivity Dynamics in Sub-Saharan Africa," Working Papers 2224, African Economic and Social Research Institute (AESRI).
    • Handle: RePEc:afa:wpaper:2224
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    Cited by:

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    2. Jian Wang & Yuzhen Zhang & Angelina Kissiwaa Twum & Andrew Osei Agyemang, 2024. "Realizing sustainable development goals in sub‐Saharan Africa: The role of industrialization on consumption‐based carbon emission," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(3), pages 2666-2677, June.
    3. Olorunfemi Yasiru Alimi & Omolara Ayotunde Campbell & Fatimah Ololade Bolarinwa, 2025. "Pathways to Achieving SDGs in Africa: Investigating the Impact of Digitalization and Labor Market Productivity on Income, Employment, Poverty, and Inequality," World Affairs, John Wiley & Sons, vol. 188(4), December.
    4. Adeleye Ebenezer OLONILUYI & Julius Oyebanji IBITOYE & Adegbola OJAROTADE, 2025. "Foreign Direct Investment, Technological Gap and Total Factor Productivity in Sub-Saharan African Economies," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(4), pages 3963-3972, April.
    5. Emma R. Norman, 2023. "Note From The Editor," World Affairs, John Wiley & Sons, vol. 186(2), pages 248-251, June.

    More about this item

    Keywords

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    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F30 - International Economics - - International Finance - - - General
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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