Abstract

This study, conducted in the context of 18 transition economies (TEs), investigates the macroeconomic spillover effect of investments in telecoms on technological advancement and growth in efficiency. Data envelopment analysis (DEA) is used to construct the Malmquist index (MI) for the growth in productivity, which is then decomposed into two components, change in efficiency (EC) and change in technology (TC). Results from structural equation modeling (SEM) indicate that while all 18 TEs exhibit relationships between investments in telecoms and the TC component, only a subset of the TEs shows a relationship between telecom investments and the EC component.

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