ABSTRACT
Past research studies have identified that differences in capital stock and infrastructure, the level of the investments in information and communication technologies (ICTs), as well as the amount and quality of the available human capital are among the factors that affect the return on investments in ICTs. We suggest that the efficiency of utilization of investments is also among the variables that can influence the level of returns and propose to investigate factors that can affect the efficiency of transformation of investments into macroeconomic outcomes.
In this research, conducted in the context of 18 transition economies (TEs), we look at a subset of investments in ICT, specifically investments in telecoms, and investigate how efficiently TEs utilize these investments to produce revenues, and what factors contribute to the efficiency of the investment utilization. We rely on a neoclassical framework of growth accounting and theory of complementarity to provide a theoretical foundation for our inquiry. This study employs a three-phase methodology utilizing data envelopment analysis, cluster analysis, and decision trees to identify 15 factors that affect the efficiency of the utilization of investments in telecoms in the context of TEs.
