THE IMPACT OF INFORMATION AND COMMUNICATIONS TECHNOLOGIES ON THE EGYPTIAN ECONOMY/ Mustafa Ahmed Ali Almahdi

Supervisor:
Tarek Khalil

Thesis (PH.D)—Nile University, Egypt, 2023 .

"Includes bibliographical references"

Contents:
TABLE OF CONTENTS
CERTIFICATE OF APPROVAL.................................................................................. II
DEDICATION.................................................................................................................III
ACKNOWLEDGEMENT..............................................................................................IV
DECLARATION...............................................................................................................V
ABSTRACT.....................................................................................................................VI
LIST OF ABBREVIATIONS ........................................................................................XI
LIST OF FIGURES..................................................................................................... XIV
CHAPTER 1.......................................................................................................................1
INTRODUCTION..............................................................................................................1
1.1 RESEARCH BACKGROUND .............................................................................. 1
1.2 EGYPT’s ICT MARKETs.................................................................................... 11
1.2.1 Ministry of Communications and Information Technology (MCIT) ........ 11
1.2.2 National Telecommunication Regulatory Authority (NTRA).................... 12
1.2.3 Supreme Council for Media Regulation....................................................... 13
1.2.4 Information Technology Industry Development Authority (ITIDA)........ 13
1.2.5 Other Sectoral Authorities Involved in the ICTs Sector............................. 14
1.3 KEY ICTs POLICIES AND PROGRAMS ........................................................ 16
1.4 ICTs MARKET STRUCTURE AND COMPETITION ................................... 17
1.5 REGIONAL AND INTERNATIONAL COMPARISON ON ICTs SECTOR
DEVELOPMENT........................................................................................................ 22
1.6 THE HISTORY OF INVESTMENTS IN THE ICTS SECTOR OF EGYPT 23
1.7 STRUCTURE OF THE DISSERTATION......................................................... 30
CHAPTER 2.....................................................................................................................31
LITERATURE REVIEW ...............................................................................................31
2.1 PREFACE.............................................................................................................. 31
2.2 IMACT OF ICTs BROADBAND TECHNOLOGIES ON GDP...................... 31
2.3 ICTs DIFFUSION AND ECONOMIC GROWTH............................................ 34
2.4 RELATIONSHIP BETWEEN ICT INVESTMENTS AND ECONOMIC
DEVELOPMENT IN EGYPT ................................................................................... 40
2.5 RESEARCH GAPs................................................................................................ 53
CHAPTER 3.....................................................................................................................56
VIII
RESEARCH METHODOLOGY ...................................................................................56
3.1 PREFACE.............................................................................................................. 56
3.2 RESEARCH PROBLEM STATEMENT ........................................................... 56
3.3 RESEARCH QUESTIONS .................................................................................. 57
3.4 RESEARCH OBJECTIVES ................................................................................ 57
3.5 HYPOTHESES OF THE STUDY ....................................................................... 58
3.6 DESCRIPTION OF THE STUDY AREA .......................................................... 58
3.7 SIGNIFICANCE OF THE STUDY..................................................................... 59
3.8 RESEARCH PARADIGM ................................................................................... 60
3.8.1 Positivism......................................................................................................... 60
3.8.2 Interpretivism ................................................................................................. 61
3.8.3 Chosen research paradigm.............................................................................. 61
3.9 RESEARCH DESIGN .......................................................................................... 61
3.9.1 Descriptive Research Design.......................................................................... 61
3.9.2 Explanatory Research Design........................................................................ 62
3.9.3 Exploratory Research Design........................................................................ 62
3.9.4 Experimental research design ....................................................................... 62
3.9.5 Chosen research design................................................................................... 62
3.10 RESEARCH APPROACH................................................................................. 63
3.10.1 Quantitative Research Approach................................................................ 63
3.10.2 Qualitative Research Approach .................................................................. 63
3.10.3 Mixed Research Approach .......................................................................... 63
3.10.4 Chosen Research Approach .......................................................................... 64
3.11 DATA COLLECTION ....................................................................................... 64
3.11.1 Primary Data Collection .............................................................................. 64
3.11.2 Secondary Data Collection........................................................................... 65
3.11.3 Chosen Data Collection method.................................................................... 65
3.12 POPULATION AND SAMPLING.................................................................... 65
3.12.1 Chosen population and sampling.................................................................. 66
3.13 MODEL CONCEPTUAL FRAMEWORK...................................................... 68
3.13.1 Model specifications ..................................................................................... 68
3.13.2 Methodology for Testing and validation of the dataset and model results
................................................................................................................................... 71
IX
3.13.3 Unit Root or Stationarity Test..................................................................... 71
3.13.4 Cointegration Test........................................................................................ 72
3.13.5 Correlation Test............................................................................................ 73
3.13.6 Causality Test................................................................................................ 74
3.13.7 Model Validity and Reliability .................................................................... 74
3.13.8 Chosen Model, Method, Testing and Validation.......................................... 76
3.14 DATA ANALYSIS METHOD........................................................................... 77
3.14.1 Chosen Data Analysis Methods..................................................................... 78
3.15 ETHICAL CONSIDERATIONS....................................................................... 78
3.16 SUMMARY.......................................................................................................... 79
CHAPTER 4.....................................................................................................................81
RESULTS AND DISCUSSIONS....................................................................................81
4.1 PREFACE.............................................................................................................. 81
4.2 DISCUSSIONS ON DATA................................................................................... 81
4.2.1 Study Variables Specifications...................................................................... 82
4.2.2 Model Data ...................................................................................................... 82
4.2.3 Results of the Test of the Dataset Unit Root ................................................ 89
4.2.4 VECM Estimation and Cointegration Testing ............................................ 95
4.2.4.1 Lag selection for VECM............................................................................... 97
4.2.4.2 Results of Johansen Cointegration Test...................................................... 98
4.3 VECTOR ERROR CORRECTION MODEL (VECM) ................................. 99
4.3.1 VECM model estimation and analysis.......................................................... 99
4.3.2 Fixed Broadband Technology (FB) Model (GDP per capita and Fixed
Broadband)............................................................................................................. 103
4.3.3 Mobile Broadband Technology (MB) Model (GDP per Capita and mobile
broadband)............................................................................................................. 106
4.3.4 ICTs Regulatory Tracker Index (RI) Model (GDP per Capita and RI) . 109
4.3.5 Government Expenditure in ICTs Model (GDP per Capita and
GovExpenditureICTs)........................................................................................... 112
4.3.6 Mobile Broadband Capable device penetration Model (GDP per Capita
and MB Capable Device) ...................................................................................... 115
4.4 TESTING OF THE MAIN HYPOTHESES OF THE RESEARCH.............. 118
4.4.1 Null Hypotheses ............................................................................................ 118
X
4.4.2 Interpretation of the Empirical Results...................................................... 120
4.5 RESULTS OF THE CORRELATION TEST.................................................. 121
4.5.1 Interpretation of the Empirical Results...................................................... 122
4.6 RESULTS OF THE CAUSALITY TEST......................................................... 124
4.6.1 Interpretation of the Causality Empirical Results .................................... 125
4.7 RESULTS OF THE MODEL VALIDITY AND RELIABILITY .................. 126
4.7.1 Results of VECM Diagnostics and Tests .................................................... 127
4.7.2 Results of the Model validation against ITU’s Models ............................. 128
4.8 SUMMARY.......................................................................................................... 129
CHAPTER 5...................................................................................................................131
CONCLUSION AND RECOMMENDATIONS.........................................................131
5.1 MAJOR FINDINGS............................................................................................ 131
5.2 RECOMMENDATIONS.................................................................................... 140
5.3 STUDY LIMITATIONS..................................................................................... 143
5.4 FUTURE RESEARCH ....................................................................................... 144
REFERENCES...............................................................................................................148
APPENDIX 1 STATA OF VEC MAIN MODEL .......................................................163
APPENDIX 2 STATA OF VEC FB MODEL .............................................................166
APPENDIX 3 STATA OF VEC MB MODEL............................................................169
APPENDIX 4 STATA OF VEC RI MODEL..............................................................172
APPENDIX 5 STATA OF VEC GOVERNMENT EXPENDITURE IN ICTS
MODEL ..........................................................................................................................175
APPENDIX 6 STATA OF VEC MOBILE BROADBAND CAPABLE DEVICE
MODEL ..........................................................................................................................178
APPENDIX 7 AUTHOR’S PUBLISHED PAPER .....................................................181

Abstract:
In this research, several econometric techniques have been used to develop a multivariate
prediction model to measure the economic impact of ICTs in Egypt from 2000 to 2021. The
models have been employed to investigate the relationship between the dependent variable
(GDP per capita) and several independent variables. The study adopted Vector Error
Correction Model (VECM) and investigation procedures involved unit root testing
Augmented Dickey Fuller, Johansen cointegration test, Maximum Likelihood Estimator
(MLE) regression analysis and Granger causality test.
The empirical results showed that in Egypt a 1 % increase in the subscriptions of fixed
broadband corresponds to an increase of GDP per capita of 0.023 %, a 1 % increase in the
subscriptions of mobile broadband resulted in an increase GDP per capita of 0.0423% and
a 1 % increase in the Government Expenditure in ICTs, corresponds to an increase GDP
per capita by 0.775%. The results also showed that the regression model is significant, valid
and reliable and there is strong and a long- equilibrium relationship between variables and
trends in the data that occur every 1 to 5 years.
The study provided policy recommendations related to investment in mobile broadband
infrastructure, ICT annual investments, labor, and the need to spend more on the ICTs
sector to support the growth of the broadband technologies industry in Egypt. Future
research is proposed to include investigating fractional integration, testing for non-linear
relationships and integration of machine learning methods as well as a carrying cross
country and sectorial analysis.
Keywords: Broadband Technologies, Economic growth, ICTs, GDP per capita and Vector
Error Correction Model (VECM)

Text in English, abstracts in English.