Economic growth and the proliferation of ICT infrastructures: which causes the other?

Abstract

This study explored the causal association between Information and Communications Technology (ICT) infrastructure development, measured by an ICT index, and the economic growth of 42 African economies between 2000 and 2019. Whether ICT development has contributed to real per capita GDP growth or ICT infrastructure expansion has just been a consequence of growth in real per capita GDP has been overlooked in prior studies concerning Africa. The econometric techniques used to analyse the data included robust second-generation tools to investigate cross-sectional dependence, slope homogeneity, and panel causality. The findings detected significant independence between the variables across countries, the slope was heterogeneous, and there was a long-run association between all of the economies in the sample. Dumitrescu and Hurlin’s panel causality analysis indicated a unidirectional causal association between per capita income and the ICT index. The results also demonstrated that capital and employment were the leading causes of per capita GDP growth. The findings suggested that accelerating economic growth in developing economies was essential to promoting ICT investment.