Information and Communication Technology Use and Economic Growth

PLoS ONE 7(11): e48903. doi:10.1371/journal.pone.0048903

7 Pages Posted: 3 May 2013

See all articles by Maryam Farhadi

Maryam Farhadi

National University of Malaysia (UKM)

Rahmah Ismail

University of Kebangsaan

Masood Fooladi

Islamic Azad University, Mobarakeh Branch

Date Written: May 2, 2013

Abstract

In recent years, progress in information and communication technology (ICT) has caused many structural changes such as reorganizing of economics, globalization, and trade extension, which leads to capital flows and enhancing information availability. Moreover, ICT plays a significant role in development of each economic sector, especially during liberalization process. Growth economists predict that economic growth is driven by investments in ICT. However, empirical studies on this issue have produced mixed results, regarding to different research methodology and geographical configuration of the study. This paper examines the impact of Information and Communication Technology (ICT) use on economic growth using the Generalized Method of Moments (GMM) estimator within the framework of a dynamic panel data approach and applies it to 159 countries over the period 2000 to 2009. The results indicate that there is a positive relationship between growth rate of real GDP per capita and ICT use index (as measured by the number of internet users, fixed broadband internet subscribers and the number of mobile subscription per 100 inhabitants). We also find that the effect of ICT use on economic growth is higher in high income group rather than other groups. This implies that if these countries seek to enhance their economic growth, they need to implement specific policies that facilitate ICT use.

JEL Classification: L86

Suggested Citation

Farhadi, Maryam and Ismail, Rahmah and Fooladi, Masood, Information and Communication Technology Use and Economic Growth (May 2, 2013). PLoS ONE 7(11): e48903. doi:10.1371/journal.pone.0048903, Available at SSRN: https://ssrn.com/abstract=2259563

Maryam Farhadi (Contact Author)

National University of Malaysia (UKM) ( email )

Bandar Baru Bangi, Selangor 43000
Malaysia

Rahmah Ismail

University of Kebangsaan ( email )

Bangi, Selangor 43600
Malaysia

Masood Fooladi

Islamic Azad University, Mobarakeh Branch ( email )

Department of Accounting
Mobarakeh Branch
Mobarakeh, Isfahan
Iran

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