Adoption and Impact of ICT on Labour Productivity in Africa: Evidence from CrossCountry Firm-Level Data
Date
2021-07-12
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 African 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 ICTcapital 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.