The Impact Of Mobile Telecom Penetration On Economic Growth A Case Study Of Ethiopia

This paper examined the impact of mobile phone penetration rate on economic growth inrnEthiopia over the period 1999Q1 to 2019Q1, with a quarterly data of 81 observations. Thernlong-run and short-run parameters were estimated using autoregressive distributed lagrn(ARDL) bounds testing approach for cointegration analysis. Granger Causality Analysisrnwas also done to determine the causality between mobile phone penetration and economicrngrowth. Empirical finding indicate that Mobile phone penetration rate is significant in longrnrun and insignificant in the short run and has positive impact on real GDP per capita bothrnin the short run and long run. A 1% increase in Mobile phone penetration rate increasesrnreal GDP per capita by 0.165% and 0.013% in the long run and short run, respectively. Thernoverall result showed that mobile phone penetration rate has a positive impact on economicrngrowth both in the short run and long run. The magnitude of the ECT coefficient is -rn0.192228 implying about 19.2% of the disequilibrium quarterly converge towards long runrnequilibrium in the following Quarter. The Tado-Yamomoto Granger causality test result isrnalso consistent with the co-integration result indicating bi- directional causality betweenrnmobile phone penetration rate and economic growth in Ethiopia for the period under study

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