Investigating the Impact of Investments in Telecoms on Microeconomic Outcomes: Conceptual Framework and Empirical Investigation in the Context of Transition Economies

Abstract

We propose and test a conceptual model allowing for the investigation of the microeconomic impact of investments in telecoms. While the impact of investments in telecoms on the macroeconomic outcomes has been previously investigated, there seems to be no published research that looked at the microeconomic impact of telecom investments. The proposed conceptual model links investments in telecoms with microeconomic constructs that are closely associated with such measure of macroeconomic bottom line as GDP; this allows us to outline a more detailed path traversed by the impact of investments. We use structural equation modeling to test the proposed model in the context of a sample of transition economies comprising two groups differing in terms of economic development. The results suggest the existence of the context-independent paths that are common to both groups; however, there is evidence that some of the impacts of investments in telecoms are dependent on the level of economic development. The results of the investigation offer valuable insights to decision and policy makers tasked with the responsibility of improving the micro- and macroeconomic impacts of investments in telecoms.