The effects of internet usage, financial development and trade openness on economic growth in South Africa: a time series analysis

Salahuddin, Mohammad and Gow, Jeff (2016) The effects of internet usage, financial development and trade openness on economic growth in South Africa: a time series analysis. Telematics and Informatics, 33 (4). pp. 1141-1154. ISSN 0736-5853

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Abstract

This study estimates the effects of Internet usage, financial development and trade openness on
economic growth using annual time series data for South Africa for the period 1991-2013. Structural
unit root test and Johansen and ARDL cointegration tests are performed to examine the long run
relationship amongst Internet usage, financial development, trade openness and economic growth.
Findings from ARDL cointegration tests indicate a long-run relationship between the variables. Results
from the ARDL estimates indicate a positive and significant long run relationship between Internet
usage and economic growth in South Africa. Also, there is significant positive relationship between
financial development and economic growth. However, the short run relationship among the variables
was found to be insignificant. The robustness of the long-run relationship between the variables was
checked by the application of dynamic ordinary least squares (DOLS) estimation. The Granger
causality test reveals that both Internet usage and financial development Granger-cause economic
growth in South Africa. This causal link is found to be robust from the application of impulse response
and variance decomposition analysis. Based on these findings, this study recommends that the South
African government continue with policies that aim to invest more resources into its Internet
infrastructure to further expand its network and usage.


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Item Type: Article (Commonwealth Reporting Category C)
Refereed: Yes
Item Status: Live Archive
Additional Information: Accepted Version deposited in accordance with the copyright policy of the publisher.
Faculty / Department / School: Current - Faculty of Business, Education, Law and Arts - School of Commerce
Date Deposited: 16 Dec 2015 03:09
Last Modified: 20 Oct 2016 04:04
Uncontrolled Keywords: ARDL, DOLS, economic growth, Granger causality, internet usage, South Africa
Fields of Research : 08 Information and Computing Sciences > 0806 Information Systems > 080602 Computer-Human Interaction
14 Economics > 1402 Applied Economics > 140202 Economic Development and Growth
14 Economics > 1403 Econometrics > 140305 Time-Series Analysis
Identification Number or DOI: 10.1016/j.tele.2015.11.006
URI: http://eprints.usq.edu.au/id/eprint/28230

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