ICTs quality and technical efficiency: An empirical analysis

Gideon Ndubuisi*, Chuks Otioma, Solomon Owusu, Godsway Korku Tetteh

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

7 Citations (Scopus)

Abstract

In 1987, Robert M. Solow hinted at the computer age and productivity statistics puzzle. While this puzzle persisted for many years, a growing literature has picked it up to examine the effect of ICTs on technical efficiency. However, this literature has focused mainly on quantity-based ICTs measures, which have come under severe criticism in recent times. We advance this literature in this paper by shifting the focus of analysis to quality-based ICTs measures; in this case, Internet quality. We also extend the literature by examining how the envisaged relationship between ICTs quality and technical efficiency is conditioned by a country's unique attributes. Our results show a significantly positive effect of ICTs quality on technical efficiency. We also find that the technical efficiency gains associated with ICTs quality are higher in skill-abundant countries, countries that engage more intensively in cross-border trade, have stronger contracting institutions, and are endowed with well-functioning and well-developed financial markets that ensure greater efficiency of capital allocation. We find a network effect in the nexus between ICTs quality and technical efficiency. That is, the marginal effect of ICTs quality on technical efficiency increases as the number of Internet users expands. We discuss the policy implications of our findings.
Original languageEnglish
Article number102439
JournalTelecommunications Policy
Volume46
Issue number10
DOIs
Publication statusPublished - 2022

Keywords

  • ICTs quality
  • Internet speed
  • Network effects
  • Technical efficiency

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