Cellular Tele Density and Gdp of Bangladesg

CONTENTS 1. Title ………………………………………………………. 2 2. Introduction………………………………………………………. 2 3. Statement of the problem………………………………………………………. 2 4. Purpose of the study………………………………………………………. 3 5. Literature Review………………………………………………………. 3 6. Research question………………………………………………………. 6 7. Hypothesis………………………………………………………. 6 8. Development of Conceptual Framework………………………………………………………. 7 9. Operational Definition………………………………………………………. 7 10. Research Methodology 10. 1 Research Design………………………………………………………. 8 10. Research Approach & Data Collection………………………………………………………8 10. 3 Data Analysis Procedure………………………………………………………. 9 11. Research Timeline………………………………………………………. 9 12. Limitation of the study………………………………………………………. 10 13. References………………………………………………………. 10 1. Title What is the relationship between cellular tele-density and Gross Domestic Product in Bangladesh ? 2. Introduction The almost exponential growth in the telecom sector in Bangladesh in the last 5-10 years has had some transformative impact on Bangladesh’s economy.

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Hence, in the current study, the researchers intend to examine the relationship between economic growth which is measured by GDP and telecommunications development (in particular mobile telecommunications) represent by Teledensity in Bangladesh. In this research proposal, teledensity refers to the number of telephones available per hundred inhabitants of a particular territory. Tele-Density is also used to measure the level of development in telecommunication. Most of the researchers associate the level of a country’s telecommunication infrastructure with its teledensity surpassed our expectations. 3. Statement of the problem

Over the last two decades, the telecommunications sector in many countries has been expanding rapidly. It has been widely recognized that advancement in telecommunications technology is one of the driving forces of globalization and the rapid growth of the economy. Developments in satellite, optical fibre, mobile technology, the Internet and the World Wide Web have greatly improved global communications and facilitated the exchange of information between different people in the world. Technological innovations in telecommunications have reduced communications costs and facilitated the globalization of production and markets.

Thus study assessing the impact of mobile telecommunications on economic growth and telecommunications productivity is important (Shiu A. and Lam P. -L). Bangladesh is a developing country where information and communication technologies are in growing stage. Eventually, the use of telecommunications in all its form is increasing as well. In this context, policy makers of this country are putting much importance in the impact of teledensity on GDP. Hence, here the researchers intend to examine whether there is relationship between teledensity and GDP (gross domestic product) of Bangladesh. 4. Purpose of the study

One of the major prerequisites of economic integration in a modern, complex society is the development of sound infrastructure in the telecommunications sector. The establishment of a modern, reliable, and rapidly expanding telecommunications infrastructure contributes considerably to the promotion of a variety of activities of economic expansion (World Bank Telecommunications Sector Reports, 1991). Thus the main objective of this paper is to study the relationships between economic growth which is measured by GDP and telecommunications development (in particular mobile telecommunications) represent by Teledensity in Bangladesh. . Literature Review It has been well documented that world-wide there is a high correlation between Teledensity and Gross Domestic Product (GDP) (Saunders et al, 1994). This strong correlation was first pointed out by Jipp in 1963 (as cited in Gille, 1986). TELE-DENSITY is commonly used to measure the level of development in telecommunication. Most of the researchers associate the level of a country’s telecommunication infrastructure with its teledensity (Gille, 1986; Saunders et al. 1994). A standard definition of teledensity refers to the number of telephones available per hundred inhabitants of a particular territory.

Today, teledensity is the basic measure of telecom development just like GDP per capita, which shows the economic strength of a country. It also shows the strength of telecom infrastructure. GDP this entry gives the gross domestic product (GDP) or value of all final goods and services produced within a nation in a given year. A nation’s GDP at purchasing power parity (PPP) exchange rates is the sum value of all goods and services produced in the country valued at prices prevailing in the United States.

This is the measure most economists prefer when looking at per-capita welfare and when comparing living conditions or use of resources across countries. The measure is difficult to compute, as a US dollar value has to be assigned to all goods and services in the country regardless of whether these goods and services have a direct equivalent in the United States (for example, the value of an ox-cart or non-US military equipment); as a result, PPP estimates for some countries are based on a small and sometimes different set of goods and services.

In addition, many countries do not formally participate in the World Bank’s PPP project that calculates these measures, so the resulting GDP estimates for these countries may lack precision. For many developing countries, PPP-based GDP measures are multiples of the official exchange rate (OER) measure. The difference between the OER- and PPP-denominated GDP values for most of the wealthy industrialized countries are generally much smaller. Per capita figures expressed per 1 population. Gross domestic product (GDP) refers to the market value of all final goods and services produced within a country in a given period.

Arthur O’Sullivan, GDP (the measure of an economy adopted by the United States in 1991; the total market values of goods and services produced by workers and capital within a nation’s borders during a given period (usually 1 year)) Shiu and Lam (2008) found out that there is a bidirectional relationship between real GDP and telecommunications development (as measured by teledensity) for European countries and for those belonging to the high income group, between the period 1980 and 2006.

This implies that in these countries, an increase in real GDP raises the demand for telecommunications services, which, in turn, raises real GDP. In less-developed countries, however, the relationship is, in general, unidirectional, that is, it runs from real GDP to teledensity. However, when the impact of mobile telecommunications development on economic growth is measured separately, the bi-directional relationship is no longer restricted to European and high-income countries. The results indicate that mobile telecommunications development is an important driving force of economic growth.

There is a high correlation between the level of telecommunications infrastructure represented by teledensity and the level of economic power represented by the national per capita Gross Domestic Product (GDP) Worldwide. Since then, many studies have examined the contributions of teledensity to economic and society. Saunders discussed the benefits of teledensity in terms of financial and economic returns. He showed that the World Bank’s teledensity investment projects brought an average financial rate of return of 18% and economic rates of return ranging from 20% to 50%.

Significant economic benefits are projected from the Tele communication in Bangladesh. Overall contribution to GDP is expected to accelerate, and will reach 2. 6% p. a. in 2020. (A study done by GP) Another key benefit of this increased economic activity will be tax revenues for the governments. Over the ten year period, it is estimated that the telecommunication could contribute 4. 6% of government revenues in Bangladesh An increase of 10 mobile phones per 100 people boosts GDP growth by 0. 6%. (BTRC annual report 2007-08). In 2007 the contribution by the mobile sector to GDP was more than 1%” said World Bank senior ICT specialist Tenzin Dolma Norbhu. Research results show that generally, in developing countries, GDP increases by 0. 6 percent when connectivity, especially the teledensity, increases by 10 percent. In Bangladesh, in the last two years, teledensity has increased from 32 percent to 45 percent. This expansion of telecommunication sector went beyond expected level and has greatly influenced aggregate investment, FDI and productivity. If teledensity, as per Government’s commitment, increases to 70 percent by 2015 and 90 percent by 2021. here will be an additional increase of GDP by 2. 1 percent by 2015 and 3. 3 percent by 2021. 6. Research question This study proposes to investigate the following research question: Is there any significant relationship between cellular teledensity and GDP in Bangladesh? 7. Hypothesis The hypothesis derived from the research question is: There is significant relationship between cellular teledensity and GDP growth rate in Bangladesh 8. Development of Conceptual Framework The conceptual framework for the proposed study is presented below:

Figure1: Conceptual Framework of Research Variables and their Relationships. 9. Operational Definition Table: Operational Definition of Measured Variables |Measured Variables |Operational Definitions | |Cellular tele-density |Was operationally defined by Gille, 1986 | |GDP |Was operationally defined by United States in 1991 | 0. Research Methodology 10. 1 Research Design The representation of the proposed framework (figure 1) depicted the pattern and structure of relationships among the set of measured variables. The research question and hypothesis clearly support this model. Hence, the purpose of the study is to measure correlation between the variables. The present study will investigate the relationship between tele-density and GDP growth rate in Bangladesh. Research that studies the relationship between two or more variables is referred to as a correlational study (Cooper & Schindler, 2003).

That is why a correlational research design has been selected in order to find out the appropriate answers to the research questions and to test the hypotheses. The model (Figure 1) also suggests this type of design. Here “cellular tele-density” is considered as independent variable and “GDP growth rate” is being considered as a dependent variable. The research will use a correlational study to establish the existence of relationships between the measured variables. A Correlation study provides a measure of the degree between two or more variables.

Therefore, the present study will be characterized as a correlational study. 10. 2 Research Approach & Data Collection Researchers will gather data from secondary source. Teledensity and GDP will be fetched from annual reports of different companies and Bangladesh Bureau of Statistics. Other sources are Bangasldesh Telecommunication Regulatory Commission and Bangladesh Ministry of finance reports. 10. 3 Data Analysis Procedure Pearson’s Correlation analysis will be used to find out whether any relationship exists between the independent and dependent variables.

A Correlational analysis is the statistical tool that can be used to describe the degree to which one variable is linearly related to another (Levin & Rubin, 1998). Pearson correlation coefficient (r) symbolizes the estimate of strength of linear association and its direction between interval and ratio variables; based on sampling data and varies over a range of +1 to -1; the prefix (+,-) indicates the direction of the relationship (positive or inverse), while the number represents the strength of the relationship (the closer to 1, the stronger the relationship;0=no relationship) 11. Research Timeline 2011 October Research Proposal Writing • 2011 November Literature Review • 2011 November Development of conceptual frame work • 2011 December Data collection procedure • 2012 FebruaryData analysis and interpretation of the findings • 2012 March Final redraft of complete manuscript • 2012 April Submission of research paper 12. Limitation of the study One drawback of GDP however is that it can only measure what the government has measured. Anything traded without the government knowing won’t be included in the GDP, which can be significant. 3. References 1. Gille, L. (1986). Growth and Telecommunications. In Information, Telecommunications and Development,pp. 25-61. Geneva: ITU. 2. Saunders, R. J. (1982). Telecommunications in Developing Countries: Constraints on Development. In M. Jussawall & D. M. Lamberton (Eds. ), Communication Economics and Development. pp. 190-210. Honolulu: The East-West Center. 3. Shiu, A. and Lam, P. L. (2008). Causal relationship between telecommunications and economic growth in China and its regions. Regional Studies, 42, 705–18. Sueyoshi, T. (1994).

Stochastic frontier production analysis: Measuring performance of public telecommunications in 24 OECD countries. European Journal of Operational Research, 74, 466-478. 4. Chakraborty, C. and Nandi, B. (2003). Privatization, telecommunications and growth in selected Asian countries: an econometric analysis. Communications and Strategies, 52, 31-47. 5. Shiu, A. and Lam, P. L. (2006)Relationships between Economic Growth, Telecommunications Development and Productivity Growth: Evidence around the World by ITU 6. CIA World Factbooks 18 December 2003 to 28 March 2011. Retrieved from http://www . NationMaster. om/graph/eco_gdp_percap-economy-gdp-nominal-per-capita 7. Finance Division, Ministry of Finance Government of the People’s Republic of Bangladesh, June, 2011, “ Journey Towards A Digital Bangladesh ” 8. Engr. M. Shamsul Alam PhD & Professor & Dean (Electrical & Computer Engineering Faculty ) And Director Energy Research Center. “ Impact of Teledensity on GDP of the world ”. 9. Web link : http://www. btrc. org. bdU 10. Web Link : www. nationmaster. com/graph/eco_gdp_percap-economy-gdp 11. Web Link : http://ns. bdnews24. com/details. php? id=103138&cid=4 ———————– GDP Cellular tele-density

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