The Effect Of Telephone Connection In The Economic Growth Of Kenya

Abstract

This paper investigated the relationship between telephone connection and GDP using time series data from Kenya for the period 1988 to 2018. Although telecommunication sector is identified as enabler of Kenya’s vision 2030 and it has grown rapidly, empirical assessment of the effect of various components on GDP in Kenya is lacking. This paper sought to determine the effect of telephone connection on GDP of Kenya. An augmented Solow-Swan model was adopted. All the variables were integrated of order one and cointegration was detected. Therefore, ECM was used to analyze data. The speed of adjustment between the short run and the long run equilibrium was fairly rapid at 65.4%. The estimates show that telephone connection and GDP have a long run relationship. Thus policies that promote the telecommunications sector would increase GDP.