Investments in ICT-capital and economic performance of small and medium scale enterprises in East Africa
Journal of International Development
International Food Policy Research Institute (IFPRI), 2033 K Street NW, Washington, DC 20006, United States; Susanna Wolf Economic Commission for Africa (ECA), Addis Ababa, Ethiopia
In this paper, we focused on whether investments in ICTs could cause any increases in a firm's performance. We constructed a data set for two East African countries - Kenya and Tanzania for small and medium scale enterprises and focused on three performance indicators - internal rate of return, labour productivity and domestic and export market expansion. Findings of this paper suggested that investments in ICT have a positive impact on general market expansion. However, it has a negative impact on labour productivity, and such investment does not have any significant impact on the firm's return nor does it determine the firm's exporter (non-exporter) status. Copyright © 2006 John Wiley & Sons, Ltd.
information and communication technology; investment; small and medium-sized enterprise; Africa; East Africa; Kenya; Sub-Saharan Africa; Tanzania