Investment in Telecommunications Infrastructure and Economic Growth in Nigeria: A Multivariate Approach
10 Jan 2012-British Journal of Economics, Management and Trade (Sciencedomain International)-Vol. 2, Iss: 4, pp 309-326
TL;DR: A multivariate model of simultaneous equations was deployed in this article to investigate the impact of investment in telecommunications infrastructure on economic growth in Nigeria and the results showed that telecommunications infrastructural investment has a significant impact on output of the economy directly through its industrial output and indirectly through the output of other sectors such as agriculture, manufacturing, oil and other services.
Abstract: This paper attempts to investigate the impact of investment in telecommunications infrastructure on economic growth in Nigeria. A multivariate model of simultaneous equations was deployed. The paper also deploys three-stage least squares method to capture the transmission channels through which telecommunications infrastructure promotes growth. The finding shows that telecommunications infrastructural investment has a significant impact on output of the economy directly through its industrial output and indirectly through the output of other sectors such as agriculture, manufacturing, oil and other services. The results also show a bi-directional causal relationship between telecommunications infrastructure and economic growth. The paper recommends for more effective telecommunications infrastructure that will further impact economic growth in Nigeria.
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Journal Article•
TL;DR: In this paper, a structural macro-econometric model consisting of four blocks made up of supply, private demand, government and external sectors was developed to investigate the impact of Foreign Direct Investment on economic growth in Nigeria.
Abstract: This paper attempts to investigate the impact of Foreign Direct Investment (FDI) on economic growth in Nigeria. The research developed a structural macroeconometric model consisting of four blocks made up of supply, private demand, government and external sectors. The model deploys 18 simultaneous equations and 100 variables to capture the required proxies. The research adopted a three-stage least squares (3SLS) technique and macroeconometric model of simultaneous equations to capture the disaggregated impact of FDI on the different sectors of the economy and the inter-linkages amongst the sectors in order to give better insight into the variations inherent therein. The finding shows that FDI has a significant impact on output of the economy but that the growth effects of FDI differ across sectors. The paper recommends sector-specific policies, enhanced trade openness, import substitution development strategy incentives to existing investors, and potential overseas investors so as to enhance the development of the country. Keywords: Foreign Direct Investment, Economic Growth, Simultaneous Equation, Macroeconometric Model
24 citations
Dissertation•
01 Jan 2016
TL;DR: In this article, the authors investigate the efficiency and productivity performance of telecommunications industries in deregulated environments, and investigate the influence of environmental factors on efficiency performance, concluding that the effect of economic growth and wealth on scale efficiency is not an essential determinant of performance.
Abstract: Following telecommunications industry deregulation in United Kingdom and the introduction of competition in the United States of America's long distance telecommunications services in the 1980s, telecommunications industries in other developed and developing countries have been deregulated. Contributing to the deregulation are the influences of globalization, technological advancement, fiscal policy restraint, lending institutions' requirements, regulatory costs curtailment and the desire for improved performance. However, the benefits of deregulation remain uncertain. The motivation for this research is to investigate the efficiency and productivity performance of telecommunications industries in deregulated environments. Comparatively analyzing the experiences of Canada and Nigeria, this research addresses two broad questions. First, how did deregulatory policies influence competitiveness in the industries in the two countres? This was addressed by: (i) investigating the forces that drove deregulation, (ii) exploring the similarities and differences in the deregulatory milieu in the two countries, and (iii) evaluating competitiveness in the industry. Second, how did the industries perform in the deregulated environments? The outcomes shed lights on the efficiency, productivity and the influence of environmental factors on efficiency performance. It also imbues the applicability of structure-conduct-performance model in the understanding of deregulatory outcomes.
The approach adopted entailed empirical analysis of the two countries in the context of 17 other telecommunications industries from High Income Countries and Middle Income Countries over a 13-year period (2001–13). The study used non-parametric Data Envelopment Analysis (DEA) and the Malmquist Productivity Index to assess the efficiency and productivity changes and a random effect (RE) panel Tobit model was used to evaluate the effect of environmental factors on efficiency performance. Furthermore, responses from industry participants were obtained to complement the DEA findings. The DEA results suggest that operating in deregulated environment improves efficiency and productivity performance; a finding validated by the views of the industry participants involved in the study. The two countries, though inefficient, showed improved technical efficiency. The productivity analysis revealed both countries experienced productivity growth but it has slowed. Also, the Mann-Whitney test showed that the two countries have comparable productivity change. The Canadian telecommunications industry experienced technological progress and efficiency improvement, but the productivity change was mainly due to efficiency improvement attained through managerial effectiveness. On the other hand, the Nigerian telecommunications industry experienced technological retardation but efficiency progression. Its productivity change was due to efficiency improvements attained through enhanced operational scale.
The investigation of the influence of environmental factors on efficiency reveals that the number of years in deregulation has an insignificant negative influence on technical and scale efficiency. However, as a quadratic term, the effect is positive but remained insignificant. Revenue per subscription positively influences technical and scale efficiencies and is statistically significant. This indicates that higher prices may result in better technical efficiency and operational scale. Industry concentration level was found to have a positive but not statistically significant effect on technical and scale efficiencies and a negative but also statistically insignificant effect on pure technical efficiency. This signifies that telecommunications industry concentration is not consequential to performance. Capital expenditure to revenue ratio has no significant influence on technical efficiency but a statistically significant negative influence on scale efficiency. This signifies that scale efficiency could be attained by optimizing capital expenditure through full capacity utilization and by avoiding infrastructure duplication. Labour productivity influences technical efficiency but has an unimportant negative effect on scale efficiency. This implies that technical efficiency could be enhanced through labour productivity improvements. Also, change in real gross domestic product per capita has a negative and insignificant effect on technical and scale efficiencies. However, as a quadratic term, it has significant positive influence on scale efficiency, suggesting that countries with higher economic growth and wealth would display better scale efficiency performance. Inflation has significant positive influence on technical and scale efficiency performance. The level of development has insignificant relationship with technical and scale efficiency scores, implying that it is not an essential determinant of performance. The interaction of labour productivity and capital intensity undermines technical efficiency, signifying that efficiency improvement through labour productivity and increased use of capital is not sufficient to neutralize efficiency loss from increased capital intensity.
13 citations
02 Oct 2013
TL;DR: In this article, the impact of Information and Communication Technology (ICT) on insurance companies' profitability is examined, and the authors identify the imperatives for adoption of ICT to promote efficient and efficient service delivery in the insurance industry as a strategy for attainment of the profit maximization objectives of insurance companies in Nigeria.
Abstract: The study examines the impact of Information and Communication Technology (ICT) on insurance companies' profitability. It identifies the imperatives for adoption of ICT to promoting efficient and efficient service delivery in the insurance industry as a strategy for attainment of the profit maximization objectives of insurance companies in Nigeria. It is an empirical design study, using responses of structured questionnaire of 152 respondents from 18 insurance companies. The study concludes that there is a positive relationship between ICT adoption and insurance companies' profitability in Nigeria. This implies that adoption of ICT by insurance companies can enhance their efficiency, their quality of service delivery, and their profitability. The implication of the findings for practice is that insurance companies should endeavour to update their ITC facilities regularly, in view of its impacts on quality of service delivery and profitability. The paper highlights the need for regular training of insurance personnel to keep them abreast of the current innovations in the use of ICT so as to ensure that the industry contribute positively to the economy.
12 citations
Cites background from "Investment in Telecommunications In..."
...This implies that there is a bi-directional (direct and indirect impacts) causal relationship between ICT infrastructure and economic growth (Sridhar and Sridhar, 2009; Adegbemi Onakoya et al., 2012)....
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01 Jan 2015
TL;DR: In this article, the authors investigated the effect of government capital expenditure on the manufacturing sector output in Nigeria using quantitative time series data and multiple regression techniques in the analysis and found that the effect on the long run relationship between dependent and independent variables.
Abstract: Theoretically, both Keynesian and neoclassical economists provided tools for government’s intervention, particularly with regard to government capital expenditure. The aim of this project work is to investigate the effect of government capital expenditure on the manufacturing sector output in Nigeria. The study used quantitative time series data and multiple regression techniques in the analysis. The result of the co-integration test indicates long run relationship between dependent and independent variables. It also reveals that capital expenditure on road infrastructure (CEXR) and telecommunication (CEXT) affects the manufacturing sector output in Nigeria significantly while government capital expenditure on power has insignificant effect on manufacturing sector in Nigeria. The implication of this is that manufacturing sector output is clearly affected by factors both exogenous and endogenous to the government capital expenditure in Nigeria. We therefore recommend that, there is need for government to reduce its budgetary allocation to recurrent expenditure on power sector and place more emphasis on the capital expenditures so as accelerate economic growth in Nigeria through manufacturing sector output and that government should also increase spending on road infrastructure, particularly on capital budgeting. As our results showed, road infrastructure capital expenditure has the greatest impact on the long-run with manufacturing sector output in Nigeria.
KEYWORDS: Manufacturing Sector, Power Sector, Nigeria, Road Infrastructure, Telecommunication, Output
9 citations
References
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Book•
01 Jan 1998
9,675 citations
"Investment in Telecommunications In..." refers background in this paper
...Udjo et al. (2000) also identify infrastructure as having both direct and indirect impact on the growth of an economy....
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Posted Content•
TL;DR: This article extended these models to include tax- financed government services that affect production or utility, and showed that growth and saving rates fall with an increase in utility-type expenditures; the two rates rise initially with productive government expenditures but subsequently decline.
Abstract: One strand of endogenous-growth models assumes constant returns to a broad concept of capital. I extend these models to include tax- financed government services that affect production or utility. Growth and saving rates fall with an increase in utility-type expenditures; the two rates rise initially with productive government expenditures but subsequently decline. With an income tax, the decentralized choices of growth and saving are "too low," but if the production function is Cobb-Douglas, the optimizing government still satisfies a natural condition for productive efficiency. Empirical evidence across countries supports some of the hypotheses about government and growth.
5,497 citations
TL;DR: In this paper, the relationship between aggregate productivity and stock and flow government-spending variables is investigated and the empirical results indicate that the non-military public capital stock is dramatically more important in determining productivity than is either the flow of nonmilitary or military spending, and that military capital bears little relation to productivity.
5,163 citations
TL;DR: In this paper, the Lagrange multiplier procedure is used to derive efficient joint tests for residual normality, homoscedasticity and serial independence, which are simple to compute and asymptotically distributed as χ2.
3,423 citations
"Investment in Telecommunications In..." refers methods in this paper
...The normality test is used to examine whether the disturbances are normally distributed or not (Jarque and Bera, 1980)....
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Book•
01 Jan 1993TL;DR: In this paper, Auty highlights these drawbacks and the devastating effect they can have on developing economies with reference to six ore-exporters (i.e., Peru, Bolivia, Chile, Jamaica, Zambia and Papua New Guinea) and stresses the need to avoid 'Dutch Disease' whereby competitiveness is drained out of the agriculture and manufacturing sectors so that in the long term growth falters.
Abstract: It is widely believed that natural mineral resources are desirable However there is growing evidence that this may not always be the case Indeed, it seems that natural assets can distort the economy to such a degree that the benefit actually becomes a curse In Sustaining Development in Mineral Economies, Richard Auty highlights these drawbacks and the devastating effect they can have on developing economies With reference to six ore-exporters (viz Peru, Bolivia, Chile, Jamaica, Zambia and Papua New Guinea) he outlines how things can go badly wrong He particularly stresses the need to avoid `Dutch Disease' whereby competitiveness is drained out of the agriculture and manufacturing sectors so that in the long term growth falters
1,542 citations
"Investment in Telecommunications In..." refers background in this paper
...The co-existence of vast wealth in natural resources and extreme personal poverty in developing countries like Nigeria is referred to as the “resource curse” or 'Dutch disease' (Auty, 1993)....
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