ICT interaction with trade,FDI and financial inclusion on inclusive growth in top African nations ranked by ICT development

The significance of ICT (information and communication technology) framework in efforts to attract foreign investment (FDI), sustain commerce, and boost financial inclusion for enhanced inclusive growth has revolutionized the global system recently. Furthermore, earlier researches on the connection between ICT and growth concentrated more on general expansion than on the kind of growth that is evenly distributed and has broader societal implications than merely growing the size of the overall economic pie. This study critically analyzes the connection between ICT diffusion and inclusive growth, considering the interactive impacts of trade openness, FDI, and financial inclusion on inclusive growth in top African nations ranked in terms of ICT development, so as to close the existing literature gap. An improved-GMM (generalized method of moments) technique, founded on panel data-set spanning the years 2000–2020, is used in the study. By employing PCA (principal component analysis) to measure inclusive growth, ICT diffusion, and financial inclusion indices, the study contributes to the body of prior research. The model also accounts for the heterogeneous impact of the interactive term between ICT diffusions and trade openness, FDI, and financial inclusion on inclusive growth. Overall, results indicate that while ICT diffusion, trade openness, FDI, and financial inclusion significantly and positively enhance inclusive growth at both the individual and interaction levels, inflation hinders it. The study suggests that policymakers should establish measures to advance ICT development, encourage trade openness, attract foreign direct investment, and improve financial inclusion because these measures have tendencies to support inclusive growth by opening up a number of opportunities.     

The non-linear relationship between ICT diffusion and financial development

This research investigates the linear and non-linear effects of information and communication technology (ICT) diffusion on financial development for 81 countries over the period 1990–2015 by employing the generalized-momentum method (GMM) and panel smooth transition regression (PSTR). Some main conclusions are presented as follows. First, comparing the different effects of ICT on financial development between the high-income group and the middle- & low-income group, telephone and Internet positively influences both groups’ financial development, whereas mobile cellular causes a negative effect in high-income countries, but a positive effect in middle- & low-income countries. Second, the growth of the Internet and telephones raises the financial development in all regions, while mobile cellular growth positively affects financial development only in Africa. Finally, strong evidence appears that the PSTR models capture the smooth non-linear effects of ICT diffusion on financial development, in which the effect of ICT diffusion on financial development is positive in the lower level of ICT diffusion, but turns negative in the higher level of ICT diffusion.     

Financial development,ICT diffusion and economic growth: Lessons from MENA region

This paper aims to test jointly two economic puzzles: the effect of financial development and Information and Communication Technology (ICT) on economic growth. Theories predict a positive effect of financial development and ICT on growth but empirical studies on these relationships produced mixed results. Further, we investigate the interaction between financial development and ICT Diffusion to test whether the impact of financial development on growth is strengthened by better ICT infrastructure. In this paper we assess empirically these relationships in some MENA countries. The empirical study is based on estimation of a dynamic panel model with system GMM estimators. There are three main findings. First, our empirical results join empirical literature that find a negative direct effect of financial development on economic growth. This ambiguous relationship may be linked to many phenomenons but there are not yet clear explanations of this puzzle. Second, the estimates reveal a positive and significant direct effect of ICT proxies on economic growth. This implies that MENA countries need to reinforce their ICT policies and improve using of new Information and Communication Technology. Finally, the interaction between ICT penetration and financial development is found positive and significant in the growth regression. This implies that economies in Mena region can benefit from financial development only once a threshold of ICT development is reached.     

Intangible capital,ICT and sector growth in China

This paper explores how intangible capital affects the growth of ICT-intensive sectors in China by examining 29 sectors in 30 regions for the years 2003–2015. It is shown that the value added in ICT-intensive sectors in China will grow faster in regions with faster development of intangible capital. This effect is robust to alternative measures of intangible capital and ICT intensity indicators, and even if other region-level determinants of sector growth such as human capital, non-ICT physical capital and financial market development are taken into consideration. The findings imply that Chinese policy makers should aim for not only more ICT investment but also the development of intangible capital.     

Female participation in African labor markets: The role of information and communication technologies

This article investigates the effects of information and communication technologies (ICT) on female labor force participation in a sample of 48 African countries. We specify and estimate linear regression and dynamic panel data models with fixed effects (FE) and system-generalized method of moments (SYS-GMM) estimation over the period 2001–2017. The three main results are that ICT use (mobile phone and internet) significantly stimulates female labor force participation in Africa; this effect is enhanced by financial development and female education; the effect of ICT on female employment in Africa is strongest in the industrial sector. These results remain robust to the provision of social, cultural, and institutional variables.     

Digitalization and economic growth: A comparative analysis of Sub-Saharan Africa and OECD economies

This paper examines the contribution of digitalization to economic growth of Sub Saharan Africa (SSA) in comparison with the Organization for Economic Cooperation and Development (OECD) economies. The main reason for comparing the most and the least developed countries to measure the effects of digitalization is to have an insight of whether such effects depend on the levels of development of the country. New technologies in Sub Saharan Africa are assumed to have played significant roles in economic activity, including accessibility of communications, which was impeded by poor infrastructure, accommodation of the poor majority who were initially financially excluded from mobile banking and participation of small and medium enterprises (SMEs) in e-commerce. On the other hand, due to the effects of digitalization, least developed countries in SSA have been facing a premature deindustrialization.This study employs a panel dataset consisting of 11 years from 2006 to 2016 for 41 SSA and 33 OECD economies and we use the generalized linear methods of moments (GMM) estimators. The results show that digitalization has a positive contribution to economic growth in both groups of countries. The effect of broadband internet is minimal for SSA compared to OECD countries, whereas the impact of mobile telecommunications is higher in SSA compared to the OECD counterpart. These results are particularly interesting as less advanced technologies create more opportunities in the least developed countries since there is more space for improvement. With respect to policy implications, this study recommends that SSA governments should invest more in ICT along with other infrastructures, so as to benefit from digitalization and to realize significant economic growth.     

ICT and economic growth in Sub-Saharan Africa: Transmission channels and effects

Despite significant progress in the empirical analysis of the impact of information and communication technology (ICT) on economic growth, previous studies have not empirically examined the mechanisms by which ICT hinders or expands economic growth. The specific aim of the present study was to identify the transmission channels through which ICT contributes to economic growth. The examined channels included; openness, FDI inflows, education, domestic investment, political institution, and inflation. The study employed the panel-corrected standard errors (PCSE) and system two step system GMM techniques on a sample of 44 countries in Sub-Saharan Africa (SSA) over the period 2004–2020. Using an ICT composite index, the causal mediation analysis identified that ICT contributed directly to growth, as proposed by the growth theories. Furthermore, the same analysis identified; domestic investment, openness, and education as crucial variables through which ICT penetration indirectly promoted per capita growth in the SSA region. The robustness of this result was verified using a variety of tools. The present findings suggested that the current efforts to expand ICTs in Sub-Saharan Africa should be continued since this sector has a considerable indirect impact on promoting economic growth.     

From aperture satellite to "Internet finance": Institutionalization of ICTs in China's financial sector since 1991

China's financial industries started the process of marketization only two decades ago, but by 2017 its financial technology or fin-tech sector had taken half of the global market. The exponential diffusion of information and communication technologies (ICTs) in Chinese financial contexts have generated new organizational structures and socio-political relations that have the capacity to change China's position in the world economy. Drawing upon the sociological concept of institutionalization, this paper examines how the Chinese state has integrated ICT diffusion in its formal policies and its informal rules in China's financial development since 1991. Further, it addresses the political and socio-economic consequences of these developments. Based on the analyses of government documents and sources, trade journals, and statistic data from business databases, this paper divides the Chinese institutionalization of financial technologies into three stages and identifies the primary actors and paradigms for ICT diffusions in each stage. ICT diffusion has been constitutive but also disruptive to the existing financial policies, instrumental to the commercialization of state-owned banks, and has gradually transformed into a set of formal and informal rules accepted by a network of professionals, corporations, and government agencies. The institutionalization of ICT diffusion has engendered the continuous adjustment of financial policies and propelled innovations in China's financial economy.     

Digital divide and financial development in Africa

This paper analyses the influence of the digital divide on the new IMF financial development index on a panel of 34 African countries over the period 2005–2017. Using the instrumental variables technique, we arrive at the main result that ICT divide is a severe handicap for the financial systems development in Africa. The use of financial development sub-indices relating to financial institutions and financial markets, as well as their dimensions confirms the negative effect of the digital divide. Our result remains stable when we use alternative measures of financial development and ICT indicators. Furthermore, we found that the digital divide between countries is also a severe handicap for the financial development of countries lagging behind. On the other hand, countries with a technological lead or a digital dividend have relatively developed financial systems. Some recommendations have been suggested to promote digital penetration in Africa, as well as to improve the receptivity and flexibility of African financial systems.     

Convergence and determinants of ICT development in case of emerging market economies

This paper aims to examine the convergence of ICT development in the case of 27 emerging market economies (EMEs) using annual data from 2000 to 2018. First, by employing Phillips-Sul (PS) panel convergence test, the results not only support the evidence of convergence in ICT development but also find convergence in the composition of ICT development known as ICT access and ICT use. Second, the study identifies factors such as per capita income, human capital, and FDI which significantly affect ICT development. Third, results based on stochastic conditional convergence reveal that EMEs countries are not only converging among themselves but also ‘catch-up’ to the OECD countries.     

Evolution and determinants of digital divide in Brazil (2005–2013)

During the last decades, the widespread growth of information and communication technologies (ICT) has posed incentives to broaden the participation of individuals in social, political and economic dimensions of life. However, utilization of ICT also involves access to technology and infrastructure, and acquisition of skills to deal with innovations and, thus, digital literacy is, primarily, a complementary good. The digital divide expresses inequalities in access and utilization of ICT among individuals and populations in different countries. The study adopts inequalities indexes of Internet access and mobile phone ownership to measure use of ICT goods, accounting for the digital divide in Brazil. The inequality indexes are also split according to main determinants using four nationally representative survey data from 2005 to 2013. Results indicate that the digital divide among individuals is decreasing quite fast among Brazilians over time. However, there is room for policies of mass access to ICT goods based on mobile Internet broadband access. In addition, digital illiteracy, evaluated by lack of education, is one of the main determinants of the digital divide in the country, especially among elderly individuals.     

Urbanization and sustainable development for inclusiveness using ICTs

The arrival of information and communication technology (ICT) as well as the deployments of free and open-source software (FOSS) have brought hope to developing countries that the use of enabling technologies potentially mitigates the impact of global environmental and socio-economic crises, and it drive radical changes in a user's skills or culture. In 2019, with widespread territorial disparities, approximately 53.6% people were connected to the Internet worldwide. The majority of the offline user lives in the least developed countries, and only 19% of them use the internet, compared to 87% in developed nations. Sustainable development depends on successful management of open and inclusive urban development, especially in low-income and middle-income countries, where the fastest urbanization is expected to occur by the year 2050. The application of ICT enhances the independence, dignity, and equal opportunities of all people, thereby promoting their integration into society. An inclusive approach-based citizen participation is extremely important for building an inclusive society. Furthermore, this study highlights the current issues and challenges in developing countries, as well as the role of ICT in promoting socio-economic development, where it can serve as a catalyst for the implementation of the concept of sustainable urbanization. Considering the emerging socio-technological aspect, a framework for a sustainable socio-technical ecosystem is presented here to achieve economic independence and empowerment.     

ICT for sustainable development: Global comparative evidence of globalisation thresholds

The objectives of this paper are to investigate the effect of ICT on sustainable development and the mechanisms through which the effect is modulated. The focus is on a sample of 140 countries around the globe for the period 2000–2019. The methodology involves the: (i) Fixed Effects estimator to control for individual heterogeneity, (ii) Driscoll and Kraay estimator to control for cross-section dependence between panels, (iii) the Mean Group estimator to take into account the averages between panel groups, (iv) the system GMM to correct for unobserved heterogeneity and simultaneity bias and (v) the instrumental variable Fixed Effects Tobit to take in to account the limited range in our dependent variable. The results show that ICT has a positive and significant effect on sustainable development. Whereas overall net effects are positive, the findings are contingent on the choice of the ICT measurement, the geographical location of the economy and the income group category. The study recommends policy makers to take into account ICT and the advantages it offers in the elaboration of measures for the sustainable development agenda.     

Information communications technology and economic growth in Sub-Saharan Africa: A panel data approach

This research empirically analyzed the impact of mobile phone and the Internet on per capita income of Sub-Saharan Africa (SSA) for the period of 2006–2015 using a panel data of 40 countries. We have employed the robust two-step system GMM. Results showed that growth in mobile phone penetration has contributed significantly to the GDP per capita of the region after controlling for a number of other variables. A 10% increase in mobile phone penetration results in a 1.2% change in GDP per capita. Therefore, improving access to mobile phones will play a critical role in reducing the poverty level of the region through raising the per capita income of the population.However, the Internet has not contributed to the per capita GDP during the study period. The insignificant impact of the Internet could be due to low penetration of the technology, low ICT skill of Internet users, lack of or insufficient local content on the global network, and the relatively immature state of the technology in the region. Therefore, governments and other stakeholders should design policies that encourage expansion of the Internet. In addition to improving Internet access, policies which focus on ICT skill development and local content creation should also be designed and implemented.     

The impact of ICT patents on economic growth: An international evidence

This study aims to examine the impact of inventions, measured by the number of new patents, on economic growth. Specifically, we focus on patents in the ICT sector for a global sample of 43 economies, comprising 26 advanced and 17 emerging market economies in the period 1998 to 2016. We use a two-step system GMM to control for potential endogeneity in the data. Our results are threefold. First, total patents have mutually causal effects with economic growth, but there is no evidence of an impact of total patents on manufacturing sector growth. At the same time, ICT patents have a unidirectional causal impact on both, overall economic growth, and the growth of services and manufacturing. Second, the impact of total patents on economic growth is stronger in advanced economies. At the same time, ICT patents have a positive significant impact on the growth of advanced economies and a negative significant effect on the growth of emerging economies. Third, in the long-run, ICT patents have a positive significant impact on economic growth, while total patents do not.     

ICT investment-specific technological change and productivity growth in Korea: Comparison of 1996–2005 and 2006–2015

This paper analyses the impact of information and communications technology (ICT) on the productivity growth in Korea with the dynamic general equilibrium (DGE) model including investment-specific technological change. According to the balanced growth path analysis, ICT investment-specific technological change accounts for 18.8% to labor productivity growth in 1995–2005, then 14.3% in 2006–2015, and the decline in the rate of ICT investment-specific technological change has contributed to the slow productivity growth since the mid-2000s. In cyclical fluctuations, ICT investment-specific technological shocks were significant in output variance in 1996–2005, but neutral technological shocks and non-ICT investment specific shocks became dominant in 2006–2015. In sum, it can be concluded that the impacts of ICT investment-specific technology have diminished in the growth path and cyclical fluctuations. The result that increased (decreased) ICT investment intensity with faster (slower) ICT investment-specific technological change lead to higher (lower) productivity growth indicates that Korea has been a case against the productivity paradox, and sustained technological progress in ICT and expansion of ICT usage could have boosted the productivity growth. Therefore, this study implies that facilitating ICT progress and ICT usage outside of the already well-performing ICT manufacturing can help Korean economy raise the productivity growth rate.     

Foreign direct investment,information technology and economic growth dynamics in Sub-Saharan Africa

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 are Gross 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 favourable outcomes on economic growth dynamics. Practical and theoretical implications are discussed.