The Impact of Mobile Telecom Penetration on Economic Growth: A Case Study of Ethiopia
No Thumbnail Available
Date
2020-06
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
A.A.U
Abstract
This paper examined the impact of mobile phone penetration rate on economic growth in
Ethiopia over the period 1999Q1 to 2019Q1, with a quarterly data of 81 observations. The
long-run and short-run parameters were estimated using autoregressive distributed lag
(ARDL) bounds testing approach for cointegration analysis. Granger Causality Analysis
was also done to determine the causality between mobile phone penetration and economic
growth. Empirical finding indicate that Mobile phone penetration rate is significant in long
run and insignificant in the short run and has positive impact on real GDP per capita both
in the short run and long run. A 1% increase in Mobile phone penetration rate increases
real GDP per capita by 0.165% and 0.013% in the long run and short run, respectively. The
overall result showed that mobile phone penetration rate has a positive impact on economic
growth both in the short run and long run. The magnitude of the ECT coefficient is -
0.192228 implying about 19.2% of the disequilibrium quarterly converge towards long run
equilibrium in the following Quarter. The Tado-Yamomoto Granger causality test result is
also consistent with the co-integration result indicating bi- directional causality between
mobile phone penetration rate and economic growth in Ethiopia for the period under study
Description
Keywords
ARDL bounds test, Cointegration, Tado-Yamomoto Granger causality, Economic growth, Mobile phone penetration Rate