Telecom Penetration and Economic Growth: An Empirical Analysis

Abstract

The telecom industry is facing serious issues all over the world, the most burning on is the opening of this sector. Pakistan telecom sector also faced many challenges. The study tries to explore the relationship between telecom sector and the economic growth for Pakistan during the period 1996-2016. Our prime objective is to see the telecoms sector’s performance in Pakistan during the study period and also see the impact of this sector of GDP as well. Labor force engaged in telecom sector, investment in telecom sector and teledensity are core variables to estimate the model. Simple OLS technique is employed for estimation based on stationarity test. The study found that teledensity and labor engaged in telecom industry have huge and significant impact on economic growth of Pakistan.  In addition, results also showed that capital formation (Investment in Telecom) does not have any significant impact on GDP growth in Pakistan. These results have been useful for policy makers in order to establish strong policy to establish and flourish Telcom sector at advanced level of international standard so foreign investors do attract also.