ICT and Technical Inefficiency in SADC: A Stochastic Frontier Analysis

Abstract

This paper investigated the effect of information and communications technology (ICT) on technical inefficiency in the Southern African Democratic Community (SADC). A stochastic production and technical inefficiency functions were simultaneously estimated, using panel data on 16 SADC member countries between 1980 and 2017. The study provided evidence that ICT can reduce technical inefficiency. Further, evidence shows that capital, labour and human capital are significant in increasing countries’ outputs. This paper concluded that the Southern African Democratic Community needs to ensure that investment in ICT is increased across its member states as a means to reduce technical inefficiency and increase output.