The criticality of ICT-trade nexus on economic and inclusive growth

ABSTRACT

This paper contributes to the ICT-growth and trade-growth literature by investigating the ICT-trade nexus on economic and inclusive growth. That is, does ICT adoption enhance or distort the impact of trade on growth? With data on 53 African countries from 2005 to 2015 using mobile phones and fixed telephone subscriptions as indicators of ICT, findings provide evidence that (1) trade is a significant and positive predictor of growth, (2) the impact of trade on growth differs significantly across Africa’s sub-regions, (3) the effect of ICT adoption differs significantly across sub-regions, (4) ICT innovation enhances the impact of trade on growth, and (5) the ICT-trade nexus differ significantly across sub-regions. The study submits that these variables are critical drivers of economic and inclusive growth in Africa. However, the lack of consistency of the results across the sub-regions suggests that the level of ICT is still undeveloped. Policy implications are discussed.

KEYWORDS:

• Economic growth
• inclusive growth
• human development index
• trade openness
• ICT

JEL CODES:

• C32
• E13
• E22
• F14
• F43
• J24
• O3
• O11
• O43
• O47

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 For simplicity, growth refers to both economic and inclusive growth except where either is specifically mentioned.

2 Somalia dropped due to lack of sufficient data on the human development index (a proxy for inclusive growth).

3 See Appendix Table A1 for the list of countries and their respective regions.

4 Perhaps, because regressors and instruments outnumber the cross-sections, our model is not robust to the use of the system generalised method of moments (GMM) approach. Several simulations yielded statistically insignificant results, and in most cases, the diagnostics are returned by dotted (.) signs.

5 The differential is obtained by deducting the coefficient of the interaction term from that of trade openness.

Additional information

Notes on contributors

Bosede Ngozi Adeleye

Bosede Ngozi Adeleye an alumnus of University of Sussex, UK holds a PhD degree in Economics from Covenant University, Nigeria. She is quantitative-inclined with strong proficiency in Stata and EViews analytical software. She is the creator and tutor of CrunchEconometrix https://cruncheconometrix.com.ng a digital platform designed to teach hands-on applied econometrics to beginners, intermediate, and advanced level users. Her YouTube Channel https://www.youtube.com/c/CrunchEconometrix which has gathered more than 1.5million views has 144 videos and over 15,000 subscribers. Her research interests revolve around issues related to Sustainable Development Goals (SGDs). She is a reviewer to several international journals.

Festus Adedoyin

Festus Fatai Adedoyin is a demonstrator at the Department of Accounting, Economics and Finance, Bournemouth University, UK. His research interests span across tourism economics, energy economics, tourism taxation and consumer behavior. He has published in top tier environmental and energy economics journals, including Journal of Environmental Management, Current Issues in Tourism amongst others.

Solomon Nathaniel

Solomon Nathaniel is a PhD scholar (Advance Stage) at the University of Lagos, Nigeria and teaches economics at the Lagos State University, Nigeria. He has published in a variety of Journals indexed in the Web of Science core collections such as Science of The Total Environment, Environmental Science and Pollution Research, Geojournal, Journal of Public Affairs, Heliyon, Logforum, Serbian Journal of Management, Global Business Review to mention a few.