Information and Communication Technology Investment and Firm Productivity: Evidence from the Nigerian Banking Industry (2005-2013)

Abstract

This study investigates theimpact of information and communication technology (ICT) investment on Nigeriabanks productivity for the covered period 2005-2013. Specifically, wecontribute to existing literature by measuring the ICT investment, Non-ICTinvestment and the banks productivity respectively. We use cross section dataderived from the annual reports of the three selected deposit money banks(DMBs) in Nigeria. The methodology employ is graphical Least-Square techniques.We find that both ICT and non-ICT investments do have high positive impact butICT investment is sufficient and superior over the non-ICT investment (physicalinvestment) on banks productivity in Nigeria, thus, disregard the“IT-productivity paradox” as postulated by Solow. We recommend the followingfor improve and sustain banks productivity in the Nigerian DMBs. First, the banksmanagement should apportion more of the firm’s capital into ICT investment andinvest on quality labour size with commensurate staff salaries to boost theirproductivity effectively. Second, the Government should provide proactiveenabling business environment such as constant power, guarantee security andothers for intensive use of ICT towards greater productivity in the Nigerianbanking industry.Keywords: ICT-Investment, non-ICTinvestment , Banks Productivity, IT-Productivity Paradox,  and Graphical Least –Square