Analyzing the impact of ICT investments on productivity growth in developing countries: evidence from Cameroon

Abstract

To what extent investments in Information and Communication Technologies (ICT) have contributed to productivity growth in Cameroon? This paper explores the relationship between productivity and investment in ICT in Cameroon at firms' level in 2004. Using cross-section data and applying a Cobb-Douglas function, the studies reveals that investment in ICT has no impact on productivity, as the estimated coefficient of ICT investment on productivity is not significant. Also, ICT investment has no impact on labor productivity and labor intensity. These findings differ from results obtained by Shymal Chowdhury (2002) according to which ICT investment has negative and significant impact on labor productivity in East Africa. In Cameroon labor remains the key factor of value added growth. This seems to be realistic as the country has an important workforce that tends to slow down salaries. Since labor is the abundant factor, it is profitable for firms to increase their production by recruiting more units of labor. If ICT investment contributes to rapid globalization of economies, it does not contribute to productivity growth in Cameroon.