Impacts of <scp>ICT</scp> diffusion, foreign direct investment, trade openness, and globalization on growth in Sub‐Saharan Africa

Abstract

Abstract Over the past three decades, there has been a significant increase in information and communication technology (ICT) investments around the world, resulting in a rise in the use of modern ICT packages. Sub‐Saharan African (SSA) countries, however, face different challenges. This study examines the relationship between ICT diffusion, foreign direct investment (FDI), trade openness, and economic globalization on inclusive growth for 48 SSA countries during 2005–2020. We use the modified generalized method of moments method for estimation. Empirical results reveal that ICT has a positive and significant influence on inclusive growth, while trade and economic globalization have a negative impact. FDI, on the other hand, has a favorable and considerable effect on inclusive growth. Inflation and vulnerable employment have negative impacts on inclusive growth, whereas social protection has a positive impact. From a policy standpoint, it is recommended that policymakers focus on enhancing ICT penetration in the region, particularly integrating ICT into the educational system to improve learning effectiveness and reduce research costs. Additionally, the interaction between economic globalization and ICT diffusion can enhance inclusive growth. Therefore, macroeconomic policies should promote ICT development, implement sound trade agreements, and attract capital inflows for inclusive economic growth. ICT diffusion is deemed both necessary and sufficient for SSA's advancement.