The Macroeconomic Impacts of Digitalization in Sub-Saharan Africa: Evidence from Submarine Cables
38 Pages Posted: 4 Feb 2022
Date Written: April 1, 2021
In recent decades, Sub-Saharan Africa (SSA) has experienced rapid advances in digitalization, with unprecedented growth in internet penetration. This paper investigates the impact of internet penetration in SSA on real GDP growth, productivity, and sector output and employment. The analysis treats the arrival of submarine cables to the region as a natural experiment to estimate the impacts of internet penetration. The findings suggest that higher internet penetration increases real per capita GDP growth and productivity, and impacts the composition of both output and employment, with an increasing share from the services sector.
Keywords: internet penetration, growth effect, macroeconomic impacts of digitalization, arrival IV, employment share, productivity database, Employment, Productivity, Digitalization, Estimation techniques, Labor productivity, Africa, Sub-Saharan Africa, Global
JEL Classification: F31, E26, E24, E23, O33, C13, J24
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