Telecommunications Infrastructure and Economic Growth: Evidence from Developing Countries

25 Pages Posted: 24 Aug 2008

See all articles by Kala Seetharam Sridhar

Kala Seetharam Sridhar

Institute for Social and Economic Change (ISEC) Centre for research in urban affairs

Varadharajan Sridhar

International Institute of Information Technology (IIIT) - Centre for IT and Public Policy

Date Written: August 23, 2008

Abstract

In this study, we investigate empirically the relationship between telephone penetration and economic growth, using data for developing countries. Using 3SLS, we estimate a system of equations that endogenizes economic growth and telecom penetration. We find that the traditional economic factors explain demand for mainline and mobile phones, even in developing countries. We find positive impacts of mobile and landline phones on national output, when we control for the effects of capital and labor. We discuss the associated policy implications related to improvement of telecom penetration in developing countries.

Keywords: Telecommunication, Economic growth, Reverse causality, Developing countries, Telephones

JEL Classification: H54, L96, O47, O57

Suggested Citation

Sridhar, Kala Seetharam and Sridhar, Varadharajan, Telecommunications Infrastructure and Economic Growth: Evidence from Developing Countries (August 23, 2008). Applied Econometrics and International Development, Vol. 7, No. 2, 2007. Available at SSRN: https://ssrn.com/abstract=1250082

Kala Seetharam Sridhar (Contact Author)

Institute for Social and Economic Change (ISEC) Centre for research in urban affairs ( email )

Bangalore
Karnataka
India

Varadharajan Sridhar

International Institute of Information Technology (IIIT) - Centre for IT and Public Policy ( email )

26/C, Electronics City, Hosur Road
Electronic City
Bengaluru, Karnataka 560100
India

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