What are the Effects of ICT on Intra-Industry Productivity in Sub-Saharan Africa?

Abstract

Abstract The objective of this work is to assess the effects of ICT on intra-industry productivity in sub-Saharan Africa (SSA). Indeed, perceived through the new school of Knowledge Economy (KE), ICTs present today more opportunities and development prospects for SSA countries. As knowledge, ICTs are now an unlimited resource that SSA countries can draw on to boost productivity in each industry or sector (intra-industry productivity). This paper uses data from the World Bank’s Interprise Surveys from 2004 to 2019 and covers 28 SSA countries. We first estimate the intra-industry productivity in SSA using the Fabricant’s decomposition method, and then we investigate the effects of ICT on it using a generalized least squares regression. The main results show that the level of internet use and the level of telephony use positively and significantly affect intra-industry or basic productivity in SSA. However, the effects of telephony are more significant and larger than those of the internet. Furthermore, sensitivity analyses reveal that the effects of ICT differ according to the industries and export status of firms and the official language of countries. This study recommends that sub-Saharan economies reduce the cost of access to the internet in order to increase its proportion and network of users. It also calls for a better business climate and sufficient energy production.