Foreign Direct Investment, Information Technology and Economic Growth Dynamics in Sub-Saharan Africa

Asongu, Simplice and Odhiambo, Nicholas (2019): Foreign Direct Investment, Information Technology and Economic Growth Dynamics in Sub-Saharan Africa. Published in: Telecommunications Policy , Vol. 44, No. Issue 1 (February 2020): p. 101838.

Abstract

The research assesses how information and communication technology (ICT) modulates the effect of foreign direct investment (FDI) on economic growth dynamics in 25 countries in Sub-Saharan Africa for the period 1980-2014. The employed economic growth dynamics areGross Domestic Product (GDP) growth, real GDP and GDP per capita while ICT is measured by mobile phone penetration and internet penetration. The empirical evidence is based on the Generalised Method of Moments. The study finds that both internet penetration and mobile phone penetration overwhelmingly modulate FDI to induce overall positive net effects on all three economic growth dynamics. Moreover, the positive net effects are consistently more apparent in internet-centric regressions compared to “mobile phone”-oriented specifications. In the light of negative interactive effects, net effects are decomposed to provide thresholds at which ICT policy variables should be complemented with other policy initiatives in order to engender favorable outcomes on economic growth dynamics. Practical and theoretical implications are discussed.

• Item Type: MPRA Paper
• Language: English
• Keywords: Economic Output; Foreign Investment; Information Technology; Sub-Saharan Africa
• Subjects: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E23 - Production; F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment ; Long-Term Capital Movements; F - International Economics > F3 - International Finance > F30 - General; L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities > L96 - Telecommunications; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O55 - Africa

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