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Mobile teledensity and economic growth: A case of Sub-Saharan Africa (1988-2010)
(Global Research Society, 2014-12) Wainaina, Martin C.; Obere, Almadi; Wawire, N. H. W.
The need for an efficient, modern telecommunication sector is now regarded as crucial to economic growth in transition countries. Various studies have given conflicting findings on the relationship between economic growth and telecommunication. This calls for a thorough investigation on the role, relationship and, direction of causality between mobile telephone growth and economic growth. The objective was of the study was to determine the relationship between mobile teledensity and economic growth. To achieve the objectives, the study adopted the neoclassical growth model developed by Solow and Swan (1956).Using relevant diagnostic tests, Generalized Method of Moment (GMM) method of estimation was used on the panel data from 44 of Sub-Saharan Africa countries (1988 to 2010), the study found out a two-way causality for mobile teledensity and economic growth. The study proposes that the respective governments of sub-Saharan countries should implement policies that enhance the development of the telecommunications sectors in their respective countries.