Effect of Internet usage on economic growth in Ghana and moderating role of government effectiveness

What the paper says

Purpose Internet usage, a major component of technology, has been recognised to positively impact economic growth. The economic growth in Ghana is estimated to decline in the post-COVID, era with its associated devastating effects on the citizenry. This study, therefore, seeks to find how Internet usage affects economic growth in Ghana and the moderating role of government effectiveness. Design/methodology/approach Quarterly time series data which covered the year 2000 to 2020 was deployed. The study used the autoregressive distributed lag (ARDL) method. Findings The results show that Internet usage and government effectiveness are positively associated with economic growth in both the short and long run. However, in the presence of the interactive term between Internet usage and government effectiveness, Internet usage is positively related to economic growth in the short run but negative in the long run. Nonetheless, with the moderating role of government effectiveness through quality policy formulation and its effective implementation, the overall marginal effect of Internet usage turns out to be positive on economic growth in the long run. Social implications The study therefore recommends that the government of Ghana formulate and implement appropriate Internet and information and communication technologies policies to enhance economic growth and alleviate unemployment and poverty. Originality/value Previous empirical studies on the effect of Internet usage on economic growth deployed cross-country data for the analysis, which makes it difficult to outline country-specific effects of internet usage on economic growth. Additionally, the literature on the effects of Internet usage on economic growth in the Ghanaian context and the moderating role of government effectiveness is not well-established.