GASPRO International Journal of Eminent Scholars

ABSTRACT The study investigated the dynamic relationship between telecommunication infrastructure and economic growth, using data from twenty-four low income, middle income and high income countries, including Nigeria for a 18 years period, from 1985– 2003. With a panel data set, this study used dynamic fixed effect and random effect models for estimation, which allowed us to test the relationship between country’s economic growth with initial economic condition, fixed investment, population growth, government consumption as well as telecommunication infrastructure. It was interesting to note that the results showed that telecommunication is both statistically significant and positively correlated to the real GDP per capita of these countries included in the study. The results were robust even after controlling for investment, population growth, past level of GDP per capita and lagged growth. The results further indicated that the telecommunication investment is subject to increasing returns, suggesting that countries gain more and more with the increase in telecommunication investment. The second test, Granger’s causality test confirmed the causal relationship between telecommunication infrastructure and economic growth, but the relationship is significant from telecommunication to GDP per capita side but insignificant on GDP per capita to telecommunication development side. KEYWORDS: Telecommunication, Infrastructure, Economic Growth, Low Income, Middle Income, High Income, Countries, Real GDP Per Capita, Nigeria