Impact of Information and Communication Technology on Economic Growth: Evidence from Developing Countries

The present study aims to evaluate the impact of information and communication technology (ICT) on the economic growth of selected developing countries in the Middle East and North Africa (MENA) region and the Sub-Saharan Africa (SSA) region by using a panel Generalized Method of Moment (GMM) growth model over the period 2007–2016. The results extracted from the econometric model show that except fixed telephone, other information and communication technologies such as mobile phone, Internet usage, and broadband adoption are the main drivers of economic growth in MENA and SSA developing countries over the recent period 2007–2016. In addition, our findings confirm the superiority of MENA countries over SSA countries in the areas of Internet usage and broadband adoption. From a policy perspective, the results suggest that authorities in MENA and SSA countries should increase investments in ICT infrastructure. To benefit from the ICT drivers of economic growth, policymakers should enact several important policies that permit the development of financial sectors, provide a more convenient regulatory and institutional environment, increase economy openness, prioritize the allocation of resources to the development of ICT infrastructure, and contain the negative effects of inflation and government consumption.

[1]  Jed Kolko,et al.  Broadband and Local Growth , 2010 .

[2]  Sánchez Rodriguez,et al.  Efecto de los obstáculos financieros sobre la innovación y la productividad en las empresas manufactureras en Colombia , 2020 .

[3]  Krishna P. Jayakar,et al.  Broadband Availability and Employment: An Analysis of County-Level Data from the National Broadband Map , 2013, Journal of Information Policy.

[4]  Roya Gholami,et al.  Time series analysis in the assessment of ICT impact at the aggregate level - lessons and implications for the new economy , 2005, Inf. Manag..

[5]  R. Barro.  Determinants of Economic Growth: A Cross-Country Empirical Study , 1996 .

[6]  D. Jorgenson,et al.  Information Technology and Growth , 1999 .

[7]  Mak B. Arvin,et al.  The dynamics of information and communications technologies infrastructure, economic growth, and financial development: Evidence from Asian countries , 2015 .

[8]  R. Lucas.  On the Mechanics of Economic Development , 1988 .

[9]  Mary O'Mahony,et al.  ICT and Europe's Productivity Performance: Industry-Level Growth Account Comparisons with the United States , 2005 .

[10]  Luis H. Gutiérrez,et al.  Telecommunications and economic growth: an empirical analysis of sub-Saharan Africa , 2009 .

[11]  M. Rezagholizadeh,et al.  The Impact of Information and Communication Technology (ICT) on Economic Growth in the OIC Countries , 2017 .

[12]  Hamid Sepehrdoust,et al.  Impact of information and communication technology and financial development on economic growth of OPEC developing economies , 2018 .

[13]  Khuong M. Vu,et al.  ICT as a Source of Economic Growth in the Information Age: Empirical Evidence from the 1996-2005 Period , 2011 .

[14]  Aristeidis Samitas,et al.  The effects of ICT* on output per worker , 2016 .

[15]  Andrew P. Hardy.  The role of the telephone in economic development , 1979 .

[16]  Pantelis Koutroumpis,et al.  Mobile Communications: Diffusion Facts and Prospects , 2010 .

[17]  K. Kraemer,et al.  : Evidence from , 2022 .

[18]  P. Romer.  Endogenous Technological Change , 1989, Journal of Political Economy.

[19]  A. Grimes,et al.  The need for speed: impacts of internet connectivity on firm productivity , 2009, Journal of Productivity Analysis.

[20]  Tapan P. Bagchi,et al.  Information communication technology (ICT) infrastructure and economic growth: A causality evinced by cross-country panel data , 2018 .

[21]  Jason Wapukha.  Impact of Information and Communication Technology , 2013 .

[22]  Matti Pohjola,et al.  The New Economy: facts, impacts and policies , 2002, Inf. Econ. Policy.

[23]  신애자,et al.  1998 , 2001, The Winning Cars of the Indianapolis 500.

[24]  Sophia P. Dimelis,et al.  Information Technology as a Factor of Economic Development: Evidence from Developed and Developing Countries , 2007 .

[25]  Michael R. Ward,et al.  Mobile Telecommunications Service and Economic Growth: Evidence from China , 2016 .

[26]  L. Fuß.  The Impact of Telecoms on Economic Growth in Developing Countries , 2005 .

[27]  Gary Madden,et al.  CEE telecommunications investment and economic growth , 1998 .

[28]  Mohamed Goaied,et al.  Financial development, ICT diffusion and economic growth: Lessons from MENA region , 2013 .

[29]  Pantelis Koutroumpis,et al.  The economic impact of broadband on growth: A simultaneous approach , 2009 .

[30]  A. Yousefi.  The impact of information and communication technology on economic growth: evidence from developed and developing countries , 2011 .

[31]  R. Solow.  A Contribution to the Theory of Economic Growth , 1956 .

[32]  E. Andersen,et al.  Introduction: long term economic development – demand, finance, organization, policy and innovation in a Schumpeterian perspective , 2012 .

[33]  R. Kumar.  Exploring the interactive effects of remittances, financial development and ICT in Sub-Saharan Africa: an ARDL bounds approach , 2012 .

[34]  B. Sergi,et al.  Technology Adoption and Growth in sub-Saharan African Countries , 2015 .

[35]  D. Quah.  Technology Dissemination and Economic Growth: Some Lessons for the New Economy , 2002 .

[36]  M. Arellano,et al.  Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations , 1991 .

[37]  M. Arellano,et al.  Another look at the instrumental variable estimation of error-components models , 1995 .

[38]  P. Romer.  Endogenous Technological Change , 1989, Journal of Political Economy.

[39]  Masoud Mohammed Albiman,et al.  The role of ICT use to the economic growth in Sub Saharan African region (SSA) , 2016 .

[40]  L. Röller,et al.  Telecommunications Infrastructure and Economic Development: a Simultaneous Approach Forschungsschwerpunkt Marktprozeß Und Unter- Nehmensentwicklung Research Area Market Processes and Corporate Development Abstract Telecommunications Infrastructure and Economic Development: a Simultaneous Approach * , 1996 .