The Impact of Internet on Economic Growth in North Africa: New Empirical and Policy Analysis
-
Sofien TIBA Sofien TIBA Faculty of Economic Sciences and Management of Sfax, University of Sfax, Tunisia
The purpose of this paper is to treat the impact of the Internet on growth for a sample in the case 4 economies of the North Africa over the period 1995-2017 using various techniques such as the ARDL bounds testing approach, Panel ARDL Model, OLS Fixed Effect, OLS Random Effect, FMOLS, 2 SLS, RLS, GLM, and GMM. Indeed, for the time series results, the ARDL highlights reported the presence of a negative impact of the Internet on economic growth in Algeria, Egypt, Morocco, and Tunisia. Also, the main results of the Panel data models confirm the fact that the Internet exerts a significant negative impact on growth for North Africa as a whole. These economies are invited to orient the use of the Internet towards productive ways to reap the benefits of the spread of the Internet and proactively enhance the prosperity in this region as a whole.
Copyright© 2020 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.
Bakari, S., & Tiba, S. (2020). The Impact of Internet on Economic Growth in North Africa: New Empirical and Policy Analysis. Journal of Applied Economic Sciences, Volume XV, Fall, 3(69), 605-616. https://doi.org/10.57017/jaes.v15.3(69).09
[1] Aghion, P., Howitt, P.1998. Endogenous Growth Theory. MIT Press, Cambridge, MA. ISBN: 978-0262011662, 710 p.
[2] Barro, R. 1998. Determinants of economic growth: A cross-country empirical study. MIT Press, Cambridge.NBER Working Paper No. 5698. https://www.nber.org/papers/w5698.pdf
[3] Benhabib, J., and Spiegel, M. 2005. Human capital and technology diffusion. In: P. Aghion and S.N. Durlauf (eds), Handbook of Economic Growth, 1A: 935–966. Elsevier, Amsterdam.
[4] Bertschek, I., Briglauer, W., Hüschelrath, K., Kauf, B., Niebel, T. 2015. The economic impacts of broadband Internet: A survey. Review of Network Economics, 14(4): 201–227.
[5] Biagi, F. 2013. ICT and productivity: A review of the literature. JRC-IPTS working papers on digital economy No. 2013–09. Institute of Prospective Technological Studies, Joint Research Centre.
[6] Cardona, M., Kretschmer, T., Strobel, T. 2013. ICT and productivity: Conclusions from the empirical literature. Information Economics and Policy, 25(3): 109–125.
[7] Choi, C., Yi, M.H., 2009. The effect of the Internet on economic growth: Evidence from cross-country panel data. Economics Letters, 105(1): 39–41.
[8] Cirera, X., Lage, F., Sabetti, L. 2016. ICT use, innovation, and productivity: Evidence from Sub-Saharan Africa, Policy Research Working Paper Series No. 7868, The World Bank.
[9] Commander, S., Harrison, R., Menezes-Filho, N., 2011. ICT and productivity in developing countries: New firm-level evidence from Brazil and India. Review of Economics and Statistics, 93(2): 528–541.
[10] Dedrick, J., Kraemer, K.L., Shih, E., 2013. Information technology and productivity in developed and developing countries. Journal of Management Information Systems, 30(1): 97–122.
[11] Dewan, S., Kraemer, K.L., 2000. Information technology and productivity: Evidence from country-level data. Management Science, 46(4): 548–562.
[12] Dickey, D.A., Fuller, W.A., 1979. Distribution of the estimators for autoregressive time series with a unit root. Journal of the American Statistical Association, 74: 427–431.
[13] Dimelis, S., Papaioannou, S. 2010. FDI and ICT effects on productivity growth: A comparative analysis of developing and developed countries. European Journal of Development Research, 22(1): 79–96.
[14] Draca, M., Sadun, R., Van Reenen, J. 2007. Productivity and ICT: A review of the evidence. In R. Mansell (Ed.), The Oxford handbook of information and communication technologies, 100–147 pp. Oxford University Press.
[15] Elgin, C. 2013. Internet usage and the shadow economy: Evidence from panel data. Economic Systems, 37: 111-121.
[16] Haftu, G.G. 2019. Information communications technology and economic growth in Sub-Saharan Africa: A panel data approach. Telecommunications Policy, 43: 88-99.
[17] Im, K.S., Pesaran, M.H., Shin, Y., 2003. Testing for unit roots in heterogeneous panels. Journal of Econometrics, 115: 53–74.
[18] Indjikian, R., Siegel, D.S. 2005. The impact of investment in IT on economic performance: Implications for developing countries. World Development, 33(5): 681–700.
[19] Inklaar, R., O’Mahony, M., Timmer, M.P. 2005. ICT and Europe’s productivity performance: Industry-level growth account comparisons with the United States. Review of Income and Wealth, 51(4): 505–536.
[20] Inklaar, R., Timmer, M.P., Van Ark, B. 2008. Market services productivity across Europe and the US, Economic Policy, 23(53): 139–194.
[21] Ishida, H. 2015. The effect of ICT development on economic growth and energy consumption in Japan. Telematics and Informatics, 32: 79-88.
[22] Jorgenson, D., Ho, M., Stiroh, K. 2008. A retrospective look at the US productivity resurgence. Journal of Economic Perspectives, 22: 3–24.
[23] Jorgenson, D.W., Vu, K.M. 2005. Information technology and the world economy. Scandinavian Journal of Economics, 107(4): 631–650.
[24] Jorgenson, D.W., Vu, K.M. 2010. Potential growth of the world economy. Journal of Policy Modeling, 32(5):615–631.
[25] Jorgenson, D.W., Vu, K.M. 2011. The rise of developing Asia and the new economic order. Journal of Policy Modeling, 33(5): 698–716.
[26] Jorgenson, D.W., Vu, K.M. 2016. The ICT revolution, world economic growth, and policy issues. Telecommunications Policy, 40(5): 383–397.
[27] Kao, C. 1999. Spurious regression and residual-based tests for cointegration in panel data. Journal of Econometrics, 90: 1–44.
[28] Lapatinas, A. 2019. The effect of the Internet on economic sophistication: An empirical analysis. Economics Letters, 174: 35-38.
[29] Levin, A., Lin, C.F., Chu, C.S. 2002. Unit root tests in panel data: Asymptotic and finite sample properties. Journal of Econometrics, 108: 1–24.
[30] Lucas, R.E., Jr. 1988. On the mechanics of economic development. Journal of Monetary Economics, 22(1): 3–42.
[31] Maurseth, P.B. 2018. The effect of the Internet on economic growth: Counter-evidence from cross-country panel data. Economics Letters, 172: 74–77.
[32] Najarzadeh, R., Rahimzadeh, F., Reed, M. 2014. Does the Internet increase labor productivity? Evidence from a cross-country dynamic panel. Journal of Policy Modeling, 36: 986-993.
[33] Nelson, R.R., Phelps, E.S. 1966. Investment in humans, technological diffusion and economic growth. American Economic Review: 56:69-75.
[34] Niebel, T. 2018. ICT and economic growth – Comparing developing, emerging and developed countries. World Development, 104: 197–211
[35] Noh, Y., Yoo, K. 2008. Internet, inequality and growth. Journal of Policy Modeling, 30: 1005-1016.
[36] O’Mahony, M., Timmer, M.P. 2009. Output, input and productivity measures at the industry level: The EU KLEMS database. Economic Journal, 119(538): 374–403.
[37] 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.
[38] Paunov, C., Rollo, V. 2016. Has the Internet fostered inclusive innovation in the developing world? World Development, 78: 587–609.
[39] Pesaran, H., Shin, Y., Smith, R. 2001. Bounds testing approaches to the analysis of level relationships. Journal of Applied Economics, 16: 289-326.
[40] Phillips, P.C.B., Perron, P. 1988. Testing for a unit root in time series regressions. Biometrika, 75: 335–346.
[41] Pohjola, M. 2002. The new economy in growth and development. Oxford Review of Economic Policy, 18(3): 380–396.
[42] Pohjola, M. 2002. The new economy: Facts, Impacts and Policies. Information Economics and Policy, 14(2): 133–144.
[43] Roller, L., Waverman, L., 2001. Telecommunications infrastructure and economic development: A simultaneous approach. The American Economic Review, 91(4): 909–923.
[44] Romer, P. 1986. Increasing returns and long-run growth. Journal of Political Economy, 94:1002-1037.
[45] Romer, P. 1990. Endogenous technological change. Journal of Political Economy, 98: 71-102.
[46] Salahuddin, M., Gow, J. 2016. The effects of Internet usage, financial development and trade openness on economic growth in South Africa: A time series analysis. Telematics and Informatics, 33(4): 1141-1154.
[47] Sassi, S., Goaied, M. 2013. Financial development, ICT diffusion and economic growth: Lessons from MENA region. Telecommunications Policy, 37: 252-261.
[48] Stiroh, K. 2002. Information technology and the US productivity revival: What do the industry data say? American Economic Review, 92: 1559–1576.
[49] Stiroh, K.J. 2002. Are ICT spillovers driving the new economy? Review of Income and Wealth, 48(1):33–57.
[50] Stiroh, K.J. 2005. Reassessing the impact of IT in the production function: A meta analysis and sensitivity tests. Annales d’Economie et de Statistique, 79(80): 529–561.
[51] Strauss, H., Samkharadze, B. 2011. ICT capital and productivity growth. EIB Papers, 16(2): 8–28.
[52] Timmer, M.P., Inklaar, R., O’Mahony, M., Van Ark, B. 2011. Productivity and economic growth in Europe: A comparative industry perspective. International Productivity Monitor, 21: 3–23.
[53] Van Ark, B., O’Mahony, M., Timmer, M.P. 2008. The productivity gap between Europe and the United States: Trends and causes. The Journal of Economic Perspectives, 22(1): 25–44.
[54] Van Reenen, J., Bloom, N., Draca, M., Kretschmer, T., Sadun, R. 2010. The economic impact of ICT. Centre for Economic Performance, London School of Economics. http://cep.lse.ac.uk/textonly/_new/research/productivity/Management/PDF/breugel_cStudyTheImpactofICTLSE.pdf
[55] Van Zon, A., Muysken, J. 2005. In L. Soete, and B. Weel (Eds.). The impact of ICT investment on knowledge accumulation and economic growth, The Economics of the Digital Society, 325–329 pp.
[56] Vu, K.M. 2019. The Internet-growth link: An examination of studies with conflicting results and new evidence on the network effect. Telecommunications Policy, 43: 474–483.
[57] 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.