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Foreign direct investment, information technology and economic growth dynamics in Sub-Saharan Africa

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TLDR
In this paper, the authors assess how information and communication technology (ICT) modulates the effect of foreign direct investment (FDI) on economic growth dynamics in 25 countries in Sub-Saharan Africa for the period 1980-2014.
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This article is published in Telecommunications Policy.The article was published on 2020-02-01 and is currently open access. It has received 144 citations till now. The article focuses on the topics: Real gross domestic product & Gross domestic product.

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Financial globalisation dynamic thresholds for financial development: evidence from Africa

TL;DR: In this article, the authors investigated if financial development benefits from financial globalisation are questionable until certain thresholds of financial globalization are attained, and provided policy makers with levels of FDI (as percentage of GDP) that are required to start materialising financial development gains from financial globalization.
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The impact of ICT on economic growth-Comparing rich and poor countries

TL;DR: In this article, which countries-rich (high-income countries) or poor (middle-income and low-income) tend to gain more from the Information and Communication Technology (ICT) revolution?
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How Enhancing Information and Communication Technology has affected Inequality in Africa for Sustainable Development: An Empirical Investigation

TL;DR: In this article, the authors examined if enhancing ICT reduces inequality in 48 countries in Africa for the period 2004-2014 and found that increasing internet penetration and fixed broadband subscriptions have a net effect on reducing the Gini coefficient and the Atkinson index.
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Law and finance: Why does legal origin matter? [Dataset]

TL;DR: In this article, the authors assess two theories of why legal origin influences financial development: political and adaptation, and conclude that legal systems that adapt quickly to minimize the gap between the contracting needs of the economy and the legal system's capabilities will foster financial development more effectively than would more rigid legal traditions.
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An empirical retrospect of the impacts of government expenditures on economic growth: new evidence from the Nigerian economy

TL;DR: In this article, the impact of public expenditures on economic growth was revisited with respect to capital expenditure, recurrent expenditure and the government fiscal expansion in line with support for the budgetary allocations to various sectors in the context of the Nigerian economy.
References
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TL;DR: In this paper, a model of long run growth is proposed and examples of possible growth patterns are given. But the model does not consider the long run of the economy and does not take into account the characteristics of interest and wage rates.
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Another look at the instrumental variable estimation of error-components models

TL;DR: In this paper, a framework for efficient IV estimators of random effects models with information in levels which can accommodate predetermined variables is presented. But the authors do not consider models with predetermined variables that have constant correlation with the effects.
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TL;DR: For 98 countries in the period 1960-1985, the growth rate of real per capita GDP is positively related to initial human capital (proxied by 1960 school-enrollment rates) and negatively related to the initial (1960) level as mentioned in this paper.
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How to do xtabond2: An introduction to difference and system GMM in Stata

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Frequently Asked Questions (12)
Q1. What have the authors contributed in "Foreign direct investment, information technology and economic growth dynamics in sub-saharan africa" ?

The study finds that both internet penetration and mobile phone penetration overwhelmingly modulate FDI to induce overall positive net effects on all three economic growth dynamics. In the light of negative interactive effects, net effects are decomposed to provide thresholds at which ICT policy variables should be complemented with other policy initiatives in order to engender favorable outcomes on economic growth dynamics. Practical and theoretical implications are discussed. 

Future studies can improve the established findings by reconsidering the problem statement within country-specific frameworks. Hence, smartphones should be considered in future studies. It is also worthwhile to note that smartphones can be better than mobile phones in facilitating the absorptive capacity of FDI for economic growth because smartphones are designed to be connected to the internet. “ Estimating South Africa 's Output Gap and Potential Growth Rate, ” South African Journal of Economics, 85 ( 2 ), pp. 161-177. 

The main reason ICT can modulate the effect of FDI on economic growth is because, in this era of knowledge-based economies, ICT represents a factor of production because it facilitates, inter alia: the acquisition of raw materials needed for the production process, communication between various departments of production and the management of production. 

ICT is relevant in the economic prosperity of a country because it helps to boostthe country’s production capacity in a plethora of economic sectors (Hong, 2016). 

It follows that the corresponding efficiency prevailing in sector 2 represents a fraction of that prevailing in sector 1:12 AA (8)1The fixed cost can be written as:)( FDINfF where, 0 FDIN F(9)The evidence of the underlying negative nexus is characteristic of monopolistic rents for sector 1. 

These critical masses for complementary policies take into account the narrative of decreasing conditional or interactive effects. 

(iii) According to the linkages mechanism, FDI is facilitated by existing levels of technology, and foreign investments are also a means of technology transfer to domestic firms. 

Roodman (2009) is sympathetic to this identification strategy because according to him, it is not likely for the identified strictly exogenous variables to be endogenous after a first difference. 

This is mainly because in most developing countries, while FDI has been an important determinant of economic growth since political independence, the importance of information technology is comparatively more contemporary in driving development outcomes (Veeramacheneni, Vogel & Ekanayake, 2008). 

Some of the documented complementary policies that facilitate the absorptive capacity of FDI entail the improvement of human resources, enhanced financial access and institutional development (Nguyen, Duysters, Patterson & Sander, 2009). 

consistent with the theoretical underpinnings and recent SSA-centric research (Ssozi & Asongu, 2016a), education or human capital is needed to boost economic productivity. 

Consistent with the theoretical underpinnings discussed in the previous section, the adopted control variables in the conditioning information set are also motivated by factors that are essential for FDI to boost economic development.