Adoption and Impact of ICT on Labour Productivity in Africa: Evidence from Cross-Country Firm-Level Data
Date
2021-07-22
Authors
Vaumi, Achille Tefong
Leudjou, Roland
Faha, Chistophe Péguy Choub
Journal Title
Journal ISSN
Volume Title
Publisher
African Economic Research Consortium
Abstract
This paper uses a large cross-country firm-level database that contains information of
about 6,300 firms from 19 sub-Saharan Africa (SSA) countries, collected by the United
Nations Industrial Development Organization (UNIDO) in 2010 and 2011, to assess the
determinants of adoption and use of Information and Communication Technologies
(ICT) in SSA firms, while controlling for the problem of censoring that would exist in
the modelling of ICT-capital adoption choice. The gain obtained from the adoption
of ICT-capital investment has been examined by estimating the impact of ICT-capital
on labour productivity in adopters’ firms, while considering the role of Organizational
Changes (OC). Compared to the Cobb-Douglas production function the Translog
production function has been tested to be more adequate with our data. Unlike
previous work on the estimation of a production function, and given the simultaneity
between labour productivity and ICT-capital investments, the Instrumental Variables
(IV) method, has been used to address this endogeneity problem. The descriptive
analysis shows that East African firms, on average, adopt ICT-capital more than other
Africans countries, while Southern African firms, on average, use ICT-capital more
intensively than other sub-regions. Finally, we find that income, wages and firms’ size
are significant determinants of ICT-capital adoption. Moreover, the study reveals that
the impact of ICT-capital intensity on labour productivity in SSA countries is positive
and statistically significant in the presence of OC, which is robust to several different
specification tests
Description
Keywords
Adoption , Information technology and communication , Labour productivity; , Cross-country , Firm-level data , Censoring; Endogeneity , Instrumental variables , Organizational changes.