Modeling the Cost of Technology Transfer and Economic Growth in Nigeria

Abstract

This research studies the effects of wireless mobile phone technology on technology transfer and economic growth, and its distributional consequence in Nigeria. After deregulation of telecom industry, wireless technology has become widely available in Nigeria The current study argues that the availability of wireless technology helps to reduce the cost of learning and implementing world technology frontier and thus that it promotes smoother transfer of technology from technologically-advanced countries to Nigeria and brings significant growth in the economy. Using a multi-sector Schumpeterian growth model, thus, it explains the relationship between the cost of technology transfer and economic growth. The model generates two equilibria where the low equilibrium has zero growth. This study shows that a group with low cost of technology transfer is likely to achieve the high growth equilibrium while a group with high cost of technology transfer is likely to achieve the low growth equilibrium. Using the industry-level and the state-level data, the study found that the availability of wireless technology increased transfer of technology measured by the volume of imports and spurred growth in Nigeria. Moreover, the research found that the benefit of the wireless technology is greater for lower income groups and thus the technology helped to reduce distributional inequality of economic benefit.