Mobile Telecommunications and the Impact on Economic Development

Abstract

Using annual data from 192 countries over the period 1990–2007, we assess the impact of mobile telecommunications on economic growth. We find that this impact is smaller for countries with a low mobile penetration, usually low income countries. While in low income countries the mobile telecommunications contribution to annual GDP growth is 0.11%, for high income countries this is 0.20%. The increasing returns from mobile adoption are also emerging when assessing the impact on productivity growth. To promote mobile telecommunications penetration liberalization policies along with appropriate regulatory frameworks are recommended. Such policies should be pursued more forcefully in cases where serious shortcomings exist.