Do Internet and Human Capital Matter for Economic Growth in Developing Countries? Empirical Evidence from WAEMU Countries

In the attempt to establish new sources of economic growth in the West African Economic and Monetary Union (WAEMU) countries except Gunea Bissau for sustainable growth of the region, this study aims to empirically assess the role of internet and revisit the impact of human capital in these countries based on panel data from 2009 to 2014. We firstly use the principal component analysis technique to build the internet network development index and the human capital index. Then we estimate a Cobb-Douglas function under the neoclassical Solow model to establish the relationship between gross domestic product and internet and human capital by using the fixed effects estimation technique. The findings indicate that internet network development constitutes an important pillar for economic growth in WAEMU countries at the current prevailing economic environment. In addition, they reveal that the performance of human capital in terms of economic growth is weak, a result which can be attributed to the poor quality of educational systems of the union. Physical capital is another source of economic growth of the WAEMU countries established by this study. Policy message drawn from this study encourages strategies aiming to strengthen internet network development in WAEMU countries.