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Telecommunication Services and Economic Growth: Evidence from India

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  • Muttur Ranganathan Narayana

    (CIRJE, University of Tokyo and Institute for Social and Economic Change)

Abstract

This paper estimates the contribution of telecommunication (or telecom) services to aggregate economic growth in India. Estimated contribution is distinguished between public and private sectors to highlight the impact of telecom privatization on economic growth. Knowledge of policy determinants of demand of telecom services is shown to be essential to enhance growth contribution of telecom services. Using a recent sample survey data from Karnataka State in South India, price and income determinants of demand for telecom services are estimated by capacity of telephone exchanges Estimation results offer evidence for significant negative own price elasticity and positive income elasticity of demand for telecom services. In addition, survey data are used to show for non-economic factors that influence demand for telecom services including non-awareness of the usage and cost of value added services. These results have implications for design of a national policy for promotion of demand for telecom services and economic growth.

Suggested Citation

  • Muttur Ranganathan Narayana, 2008. "Telecommunication Services and Economic Growth: Evidence from India," CIRJE F-Series CIRJE-F-545, CIRJE, Faculty of Economics, University of Tokyo.
  • Handle: RePEc:tky:fseres:2008cf545
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    File URL: http://www.cirje.e.u-tokyo.ac.jp/research/dp/2008/2008cf545.pdf
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    References listed on IDEAS

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    1. Sridhar, Kala Seetharan & Sridhar, Varadharajan, 2007. "Telecommunications Infrastructure And Economic Growth: Evidence From Developing Countries," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 7(2), pages 37-56.
    2. El Khoury, Antoine C. & Savvides, Andreas, 2006. "Openness in services trade and economic growth," Economics Letters, Elsevier, vol. 92(2), pages 277-283, August.
    3. Jalava, Jukka & Pohjola, Matti, 0. "ICT as a source of output and productivity growth in Finland," Telecommunications Policy, Elsevier, vol. 31(8-9), pages 463-472, September.
    4. Das, Pinaki & Srinivasan, P. V., 1999. "Demand for telephone usage in India," Information Economics and Policy, Elsevier, vol. 11(2), pages 177-194, July.
    5. Garbacz, Christopher & Thompson Jr, Herbert G., 2007. "Demand for telecommunication services in developing countries," Telecommunications Policy, Elsevier, vol. 31(5), pages 276-289, June.
    6. Jalava, Jukka & Pohjola, Matti, 2002. "Economic growth in the New Economy: evidence from advanced economies," Information Economics and Policy, Elsevier, vol. 14(2), pages 189-210, June.
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