6 - An Analysis of the Impact of ICT Investment on Productivity in Developing Countries: Evidence from Cameroon
Corresponding Author(s) : Arsene Honore Gideon Nkama
Africa Development,
Vol. 39 No. 4 (2014): Africa Development
Abstract
To what extent have investments in Information and Communication Technologies (ICT) contributed to productivity growth in Cameroon? This paper explores the relationship between productivity and investment in ICT in Cameroon at the level of firms in 2004. Using cross- sectional data and applying a Cobb-Douglas function, the study reveals that investment in ICT has no impact on productivity, as the estimated coefficient of ICT investment on productivity is not significant. Also, ICT investment has no impact on labour productivity and labour intensity. These findings differ from Chowdhury and Wolf (2002) who found that ICT investment has a negative and significant impact on labour productivity in East Africa. In Cameroon labour remains the key factor of value added growth. This seems to be realistic as the country has a growing workforce that tends to slow down salaries. Since labour is the abundant factor, it is profitable for firms to increase their production by recruiting additional units of labour. If ICT investment contributes to rapid globalization of economies, it does not yet contribute to productivity growth in Cameroon.
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- Berndt, E.R. and Morrisson, C.J., 1995, ‘High-tech Capital Formation and Economic Performance in US Manufacturing Industries: An Exploratory Analysis’, Journal of Econometrics, 65:9-43.
- Brynjolfsson, E. and Hitt, L., 1996, ‘Paradox Lost? Firm-Level Evidence of High Return to Information Systems Spending’, posted at http://ccs.mit.edu/papers/ ccswp162 ; accessed in June 2003.
- Brynjolfsson, E. and Hitt, L., 2000, ‘Beyond Computation: Information Technology, Organizational Transformation and Business performance’, Journal of Economic Perspectives, 14:23-48.
- Chowdhury, S.K. and Wolf, S., 2002, ‘Use of ICTs and Economic Performance of Small and Medium Enterprises in East Africa’, Paper presented at WIDER Conference on the New Economy in Development, Helsinki, May.
- Daveri, F., 2002, ‘The New Economy in Europe (1992-2001)’, Paper presented at
- WIDER Conference on the New Economy in Development, Helsinki.
- Hempell, T., 2002, ‘Does Experience Matter? Productivity Effects of ICT in the German Service Sector’, Paper presented at WIDER Conference on the New Economy in Development, Helsinki, May.
- International Monetary Fund, 2001, World Economic Outlook, October. International Telecommunication Union, 2003, World Telecommunication Development Report, Geneva.
- Jorgensen et al., 2002, ‘Projecting Productivity Growth: Lessons from the US Growth Resurgence’, Paper presented at WIDER Conference on the New Economy in Development, Helsinki.
- Lal, K., 1996, ‘Information Technology, International Orientation and Performance: A Case Study of Electrical and Electronic Goods Manufacturing Firms in India’, Information Economics and Policies, 8: 269-280.
- Muller-Falke, D., 2001, ‘The Use Telecommunication and Information Technologies in Small Business – Evidence from Indian Small Scale Industry’, unpublished draft.
- Noneman, W. and Vandhoudt, 1996, ‘A Further Augmentation of the Solow model and the Empiric Growth for OECD Countries’, Quarterly Journal of Economics, 110: 943-53.
- Pohjola, M., 2000, ‘Information Technology and Economic Growth: A Cross- Country Analysis’, UNU/WIDER Working paper, No 173.
- Pohjola, M., 2002, ‘The New Economy in Growth and Development’, Paper presented at WIDER Conference on the New Economy in Development, Helsinki.
References
Berndt, E.R. and Morrisson, C.J., 1995, ‘High-tech Capital Formation and Economic Performance in US Manufacturing Industries: An Exploratory Analysis’, Journal of Econometrics, 65:9-43.
Brynjolfsson, E. and Hitt, L., 1996, ‘Paradox Lost? Firm-Level Evidence of High Return to Information Systems Spending’, posted at http://ccs.mit.edu/papers/ ccswp162 ; accessed in June 2003.
Brynjolfsson, E. and Hitt, L., 2000, ‘Beyond Computation: Information Technology, Organizational Transformation and Business performance’, Journal of Economic Perspectives, 14:23-48.
Chowdhury, S.K. and Wolf, S., 2002, ‘Use of ICTs and Economic Performance of Small and Medium Enterprises in East Africa’, Paper presented at WIDER Conference on the New Economy in Development, Helsinki, May.
Daveri, F., 2002, ‘The New Economy in Europe (1992-2001)’, Paper presented at
WIDER Conference on the New Economy in Development, Helsinki.
Hempell, T., 2002, ‘Does Experience Matter? Productivity Effects of ICT in the German Service Sector’, Paper presented at WIDER Conference on the New Economy in Development, Helsinki, May.
International Monetary Fund, 2001, World Economic Outlook, October. International Telecommunication Union, 2003, World Telecommunication Development Report, Geneva.
Jorgensen et al., 2002, ‘Projecting Productivity Growth: Lessons from the US Growth Resurgence’, Paper presented at WIDER Conference on the New Economy in Development, Helsinki.
Lal, K., 1996, ‘Information Technology, International Orientation and Performance: A Case Study of Electrical and Electronic Goods Manufacturing Firms in India’, Information Economics and Policies, 8: 269-280.
Muller-Falke, D., 2001, ‘The Use Telecommunication and Information Technologies in Small Business – Evidence from Indian Small Scale Industry’, unpublished draft.
Noneman, W. and Vandhoudt, 1996, ‘A Further Augmentation of the Solow model and the Empiric Growth for OECD Countries’, Quarterly Journal of Economics, 110: 943-53.
Pohjola, M., 2000, ‘Information Technology and Economic Growth: A Cross- Country Analysis’, UNU/WIDER Working paper, No 173.
Pohjola, M., 2002, ‘The New Economy in Growth and Development’, Paper presented at WIDER Conference on the New Economy in Development, Helsinki.