Top

NETNOMICS: Economic Research and Electronic Networking

Published in:

12-03-2021

An assessment of the impact of digital technology adoption on economic growth and labour productivity in Nigeria

Authors: Stella Chinye Chiemeke, Omokhagbo Mike Imafidor

Published in: NETNOMICS: Economic Research and Electronic Networking | Issue 1-3/2020

Activate our intelligent search to find suitable subject content or patents.

search-config

AI-assisted search

Off

Abstract

This study investigates the impact of digital technology adoption on economic growth and labour productivity in Nigeria for the period of 1990–2019. Based on an Augmented Solow Model of a hypothesised positive relationship between digital technology adoption and economic growth, we employ a Structural Vector Autoregressive (SVAR) framework and extract from it the Impulse Response Function (IRF) that measures the response of economic growth and labour productivity to a shock in digital technology adoption. We also examine the Forecast Error Variance Decomposition (FEVD), that shows the proportion of movement in economic growth and labour productivity that can be attributed to innovations in digital technology. Furthermore, a VAR Granger Causality test was conducted to ascertain the direction of causality between the variables. Overall, we find that the impact of shocks to digital technology adoption on economic growth and labour productivity is negative and significant in the short-term (within the first four quarters). However, in the medium term and above (from the fifth quarter and above), the impact of digital technology shocks becomes positive. Again, we find from the VAR Granger Causality test, that the direction of causality runs uni-directionally from digital technology to economic growth, and labour productivity. The study recommends that amongst others, industry players and government must train and re-train their workforce to quickly adapt to emerging technologies which will help reduce the time lag in reaping the full benefit of such technology. Again, there should be policies to improve the regulatory oversight of the digital technology sector in the country, to correct any market failures, while also ensuring that the proportion of Nigerians with access to digital technology tools and services keeps expanding.

previous article Technoeconomic analysis of a VDSL2/G.fast vectoring network: a case study from Greece

next article IPR policies and determinants of membership in Standard Setting Organizations: a social network analysis

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 340 Zeitschriften

aus folgenden Fachgebieten:

Bauwesen + Immobilien
Business IT + Informatik
Finance + Banking
Management + Führung
Marketing + Vertrieb
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

über 102.000 Bücher
über 537 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Finance + Banking
Management + Führung
Marketing + Vertrieb
Maschinenbau + Werkstoffe
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

Springer Professional "Technik"

Online-Abonnement

Mit Springer Professional "Technik" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 390 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Maschinenbau + Werkstoffe

Jetzt Wissensvorsprung sichern!

inform now

Accenture (2013) Defining Digital, Technology’s Current Tower of Babel, http://www.accenture.com/us-en/blogs/blogs-defining-digital-technologys-tower-babel. Accessed 14 Apr 2020.

Adeleye, N., & Eboagu, C. (2019). Evaluation of ICT development and economic growth in Africa. Netnomics, 20, 31–53. https://doi.org/10.1007/s11066-019-09131-6.CrossRef

Aghaei, M., & Rezagholizadeh, M. (2017). The impact of information and communication technology (ICT) on economic growth in the OIC countries. Environmental & Socio-Economic Studies, 17, 255–276. https://doi.org/10.25167/ees.2017.42.7.CrossRef

Albiman, M. M., & Sulong, Z. (2016). The role of ICT use to the economic growth in sub-Saharan African region (SSA). Journal of Science and Technology Policy Management, 7, 306–329. https://doi.org/10.1108/JSTPM-06-2016-0010.CrossRef

Andrianaivo, M., & Kpodar, K. (2011). ICT, financial inclusion, and growth: Evidence from African countries. Working paper no. 11/73, International Monetary Fund, IMF Working Paper.

Asongu, S. A., & Biekpe, N. (2017). Government quality determinants of ICT adoption in sub-Saharan Africa. Netnomics, 18, 107–130. https://doi.org/10.1007/s11066-017-9118-6.CrossRef

Awad, I. L. (2011). The monetary transmission mechanism in a small open economy: the case of Egypt. Journal of Economics and Business, 14, 73–96.

Bahrini, R., & Qaffas, A. (2019). Impact of information and communication technology on economic growth: evidence from developing countries. Economies, 7(1), 1–13. https://doi.org/10.3390/economies7010021.

Baro, R., & Sala-I-Martin, X. (2004). Economic growth. Cambridge: MIT Press.

10.

Beg, D., Fišer, S., & Dornbuš, D. (2010). Makroekonomija. Beograd: Datastatus.

11.

Blanchard, O. J., & Quah, D. (1989). The dynamic effects of aggregate demand and supply disturbances. American Economic Review, 79, 655–673.

12.

Blanchard, O., & Perotti, R. (2002). An empirical characterization of the dynamic effects of changes in government spending and taxes on output. The Quarterly Journal of Economics., 117(4), 1329–1368. https://doi.org/10.1162/003355302320935043.

13.

Blimpo, M., Minges, M., Kouame, W., Azomahou, T., Lartey, E., Meniago, C., Buitano, M., Zeufack, A., (2017). Leapfrogging: the key to Africa's development - from constraints to investment opportunities (English). Washington, D.C. : World Bank Group. Retrieved May 2, 2020. http://documents.worldbank.org/curated/en/121581505973379739/Leapfrogging-thekey-to-Africas-development-from-constraints-to-investment-opportunities.

14.

Bresnahan, T., & Trajtenberg, M. (1995). General purpose technologies “Engines of Growth?” Journal of Econometrics, 65, 83–108.CrossRef

15.

Brown, J. S., & Hagel, J. (2003). Letters to the editor. Havard Business Review. Retrieved April 27, 2020. http://hbr.org/2009/12/letters-to-the-editor.

16.

Brynjolfsson, E., & McAfee, A. (2014). The second machine age: Work, progress, and prosperity in a time of brilliant technologies. W W Norton & Co.

17.

Carr, N. (2003). IT doesn’t matter. Harvard Business Review, 81, 41–49.

18.

Christiano, L., & Eichenbaum, M. (1987). Temporal aggregation and structural inference in macroeconomics. Carnegie-Rochester Conference on Public Policy, 26, 63–130.CrossRef

19.

Deichmann, U., & Mishra, D. (2016). World development report 2016: Digital dividends. Washington, D.C.: World Bank.

20.

Enders, W. (2014). Applied econometric time series. New Delhi: Wiley India Pvt Ltd.

21.

Erdil, E., Turkcan, B., & Yetkiner, H., (2009). Does information and communication technologies sustain economic growth? The underdeveloped and developing countries case. TEKPOL working paper series 09/03, Ankara, Turkey.

22.

Falk, M. & Biag, F. (2015). Empirical studies on the impacts of ICT usage in Europe. Institute for Prospective Technological Studies Digital Economy Working Paper 2015/14.

23.

Fong, M. (2009). Technology leapfrogging for developing countries. In M. Khosrow-Pour (Ed.), Encyclopedia of Information Science and Technology (pp. 3707–3713). Hershey, PA, USA: Information Science Reference.

24.

Friederici, N., Ojanperä, S., & Graham, M. (2017). The impact of connectivity in Africa: grand visions and the mirage of inclusive digital development. The Electronic Journal of Information Systems in Developing Countries, 79, 1–20. https://doi.org/10.1002/j.1681-4835.2017.tb00578.x.CrossRef

25.

Gandolfo, G. (1981). Qualitative analysis and econometric estimation of continuous time dynamic models. North Holland, Amsterdam.

26.

Garcia-Zaballos, A., & Lopez-Rivas, R. (2012). Socioeconomic impact of broadband in Latin American and Caribbean countries. Technical Note No. IDB-TN-471, Washington, DC: Inter-American Development Bank (IDB). Retrieved April 19, 2020, from https://publications.iadb.org/en/socioeconomic-impact-broadband-latin-american-and-caribbean-countries

27.

Gottfries, N. (2013). Macroeconomics. Basingstoke: Palgrave Macmillan.CrossRef

28.

Hardy, A. (1980). The role of the telephone in economic development. Telecommunications Policy, 4(4), 278–286. https://doi.org/10.1016/0308-5961(80)90044-0.

29.

Harris, H., & Sollis, R. (2003). Applied times series modelling and forecasting. West Sussex: Wiley.

30.

Hernandez, K., Faith, B., Martin, P., & Ramalingam, B. (2016). The impact of digital technology on economic growth and productivity, and its implications for employment and equality: An evidence review. Institute of Development Studies Evidence Report no 207, Brighton, England.

31.

ILO. (2020). Statistics on labour income and inequality. Retrieved May 14, 2020. https://ilostat.ilo.org/topics/labour-income/.

32.

ITU. (2020). World Telecommunication/ICT Indicators database 2019. 24th Edition. Retrieved May 14, 2020. https://www.itu.int/pub/D-IND-WTID.OL-2020.

33.

Jorgenson, D., Ho, M., & Stiroh, K. (2002). Projecting productivity growth: lessons from the U.S. growth resurgence. Economic Review, Q3, 1–13.

34.

Lee, H., Levendis, J., & Gutierrez, L. (2012). Telecommunications and economic growth: an empirical analysis of sub-Saharan Africa. Applied Economics, 44, 461–469. https://doi.org/10.1080/00036846.2010.508730.CrossRef

35.

Lutkepohl, H. (2005). New introduction to multiple time series analysis. Berlin: Springer-Verlag.CrossRef

36.

Lutkepohl, H. (2012). Disentangling demand and supply shocks in the crude oil market: How to check sign restrictions in structural VARs, DIW Berlin Discussion Paper 1195. https://doi.org/10.2139/ssrn.2021757.

37.

MacKinnon, J.G. (1996). Numerical distribution functions for unit root and cointegration tests. Journal of Applied Econonometrics, 11, 601-618. https://doi.org/10.1002/(SICI)1099-1255(199611)11:6<601::AID-JAE417>3.0.CO;2-T.

38.

Madden, G., & Savage, S. J. (1998). CEE telecommunications investment and economic growth. Information Economics and Policy, 10, 173–195.CrossRef

39.

Mankiw, N. G., Romer, D., & Weil, D. N. (1992). A contribution to the empirics of economic growth. Quarterly Journal of Economics, 107(2), 407–437.CrossRef

40.

Nasab, E. H., & Aghaei, M. (2009). The effect of ICT on economic growth: further evidence. International Bulletin of Business Administration, 10, 46–56.

41.

National Academies of Sciences, Engineering, and Medicine (2017). Information Technology and the U.S. Workforce: Where are we and where do we go from here? Washington, DC: The National Academies Press. https://doi.org/10.17226/24649.

42.

Niebel, T. (2014). ICT and economic growth comparing developing, emerging and developed countries. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2560771.

43.

Oliner, S., Sichel, D., & Stiroh, K. (2007). Explaining a productive decade. Federal Reserve Board. Staff working papers, 63. Finance and Economics Discussion Series (FEDS). Retrieved May 14, 2020. https://www.federalreserve.gov/pubs/feds/2007/200763/200763pap.pdf.

44.

Papaioannou, S., & Dimelis, S. (2007). Information technology as a factor of economic development: evidence from developed and developing countries. Economics of Innovation and New Technology, 16(3), 179–194. https://doi.org/10.1080/10438590600661889.CrossRef

45.

Pesaran, M. H., Shin, Y., & Smith, R. J. (1996). Testing for the 'existence of a long-run relationship'. Cambridge Working Papers in Economics 9622, Faculty of Economics, University of Cambridge.

46.

Pradhan, P., Mak, B., & Neville, R. (2015). The dynamics of information and communications technologies infrastructure, economic growth, and financial development: evidence from Asian countries. Technology in Society, 42, 135–149. https://doi.org/10.1007/s00191-012-0279-z.CrossRef

47.

Roller, L., & Leonard, W. (2001). Telecommunications infrastructure and economic development: a simultaneous approach. American Economic Review, 91(4), 909–923. https://doi.org/10.1257/aer.91.4.909.

48.

Romer, P. M. (1990). Endogenous technological change. Journal of Political Economy, 98(5), S71–S102.CrossRef

49.

Sassi, S., & Goaied, M. (2013). Financial development, ICT diffusion and economic growth: lessons from MENA region. Telecommunications Policy, 37, 252–261. https://doi.org/10.1016/j.telpol.2012.12.004.CrossRef

50.

Schumpeter, J. (1934). The theory of economic development. Cambridge: Harvard University Press.

51.

Sepehrdoust, H., & Ghorbanseresht, M. (2019). (2018). Impact of information and communication technology and financial development on economic growth of OPEC developing economies. Kasetsart Journal of Social Sciences, 40, 546–551.

52.

Sims, C. A. (1980). Macroeconomics and reality. Econometrica, 48, 1–48.CrossRef

53.

Solow, R. (1956). A contribution to the theory of economic growth. The Quarterly Journal of Economics, 70(1), 65–94. https://doi.org/10.2307/1884513.

54.

Steinmueller, W. (2001). ICTs and the possibilities for leapfrogging by developing countries. International Labour Review, 140(2), 193–210.CrossRef

55.

Švarc, J. (2009). Croatia in knowledge society: Perspectives and dilemmas of innovation policy. Zagreb: Školska knjiga.

56.

Toader, E., Firtescu, B., Roman, A., & Anton, S. (2018). Impact of information and communication technology infrastructure on economic growth: an empirical assessment for the EU countries. Sustainability, 10(3750), 1–22. https://doi.org/10.3390/su10103750.CrossRef

57.

Todaro, M., & Smith, M. (2011). Economic development. London: Addison-Wesley.

58.

Vu, K. (2011). ICT as a source of economic growth in the information age: empirical evidence from the 1996–2005 period. Telecommunications Policy, 35(4), 357–372.CrossRef

59.

World Development Indicators. (2020). Dataset. Retrieved May 12, 2020. http://wdi.worldbank.org/tables.

60.

Yoo, S.-H. (2003). Does information technology contribute to economic growth in developing countries? A cross-country analysis. Applied Economics Letters, 10, 679–682. https://doi.org/10.1080/1350485032000138971.CrossRef

61.

Yousefi, A. (2011). The impact of information and communication technology on economic growth: evidence from developed and developing countries. Economics of Innovation and New Technology, 20(6), 581–596. https://doi.org/10.1080/10438599.2010.544470.CrossRef

Title: An assessment of the impact of digital technology adoption on economic growth and labour productivity in Nigeria
Authors: Stella Chinye Chiemeke
Omokhagbo Mike Imafidor
Publication date: 12-03-2021
Publisher: Springer US
Published in: NETNOMICS: Economic Research and Electronic Networking / Issue 1-3/2020
Print ISSN: 1385-9587
Electronic ISSN: 1573-7071
DOI: https://doi.org/10.1007/s11066-020-09143-7

Springer Professional

Abstract

Please log in to get access to your license.

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft"

Springer Professional "Wirtschaft+Technik"

Springer Professional "Technik"

Other articles of this Issue 1-3/2020

Unobserved preferences and dynamic platform pricing under positive network externality

How ICT affects economic growth in the Euro area during the economic crisis

Media delivery competition with edge cloud, remote cloud and networking

IPR policies and determinants of membership in Standard Setting Organizations: a social network analysis

Do digital governments foster economic growth in the developing world? An empirical analysis

Technoeconomic analysis of a VDSL2/G.fast vectoring network: a case study from Greece

Premium Partner