Telecom Private Investment and Economic Growth : The Case of African and Central & East European Countries

Abstract This paper examines the contribution of telecommunication private investment to economic growth in Africa and CEE countries using graphical and regression analysis. Data for fourteen African countries and thirteen CEE countries were used for the empirical analysis. The time series data is from 1999-2005. The contribution of telecommunication private investment to economic growth was estimated to be positive but insignificant in the pooled regression analysis. After con-trolling for country specific effects and causality, the effect of telecommunication private investment on GDP was found to be positive and significant. However, the positive impact on GDP was not substantial. When a cross-sectional test was carried out, the contribution of telecommunication private investment to economic growth was discovered to be positive except in 2005, and was also seen to be statistically significant up to 2002. The contribution of the mobile subscribers to economic growth was revealed to be positive and significant both in the pooled and cross-sectional regression analysis