Revisiting the effect of information and communication technologies on employment growth in Ghana: The role of enterprise formality

Abstract

The employment effect of information and communication technologies (ICT) on firm performance remains a critical topic for policy and academic research. However, our understanding of the ICT-employment growth relationship in both informal and formal sectors in developing countries remains limited. Based on repeated cross-sectional data collected in 2013 and 2015 on 483 Ghanaian manufacturing enterprises and estimating a Feasible Generalised Least Squares (FGLS) regression model, the findings show that access to the internet leads to employment growth in enterprises, while the adoption of mobile phone technologies reduces the number of workers in enterprises. The positive effect of internet access on employment growth tends to be greater in enterprises with a higher degree of formality, while informal enterprises appear to remain small in terms of employment by using internet technology. We discuss these findings and their implications for digital technology policy in developing countries.