‘Mainline’ telecommunications infrastructure, levels of development and economic growth: Evidence from a panel of developing countries

This paper assesses the growth impact of telecommunications infrastructure investment in developing countries by subjecting country-specific data on mainline tele-density and per capita growth to a Granger causality test within a panel cointegration framework. The results suggest that growth effects...

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Bibliographic Details
Published in:Telecommunications policy 2011-06, Vol.35 (5), p.441-449
Main Authors: Chakraborty, Chandana, Nandi, Banani
Format: Article
Language:English
Subjects:
Causality
Cointegration
Developing countries
Developing countries Telecommunications infrastructure Spillover network effects Development gap Growth convergence Per capita growth Mainline tele-density Cointegration Causality
Development gap
Economic development
Economic growth
Economic impact
Economic research
Financing
Growth convergence
Impact analysis
Infrastructure
Investment
LDCs
Mainline tele-density
Panel data
Panels
Per capita
Per capita growth
Public infrastructure
Reinforcement
Spillover network effects
Studies
Telecommunications
Telecommunications industry
Telecommunications infrastructure
Telecommunications policy
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Summary:This paper assesses the growth impact of telecommunications infrastructure investment in developing countries by subjecting country-specific data on mainline tele-density and per capita growth to a Granger causality test within a panel cointegration framework. The results suggest that growth effects vary widely across country groupings reflecting different levels of development. Mainline tele-density and per capita growth strongly reinforce each other for countries that are relatively less developed. The reinforcement effect is even stronger for emerging countries that can be identified by their higher than average growth rates. In contrast, there is, at best, weak evidence of bi-directional causal links between the two variables for countries that are relatively more developed. These differences in the mainline tele-density and per capita growth relationships suggest that investment in telecommunications infrastructure, with its potential to generate high growth return, may serve as the critical tool for driving the growth and development process forward in the less developed countries.
ISSN:0308-5961
1879-3258
DOI:10.1016/j.telpol.2011.03.004