ICT infrastructure, innovation development and economic growth: a comparative evidence between two decades in OECD countries

Meta Ayu Kurniawati

International Journal of Social Economics, 2020, vol. 48, issue 1, 141-158

Abstract: Purpose - The objective of this study is to examine the causal relationship between economic growth, information and communication technology (ICT) penetration and innovation development in OECD countries. Design/methodology/approach - This study incorporates data for 24 OECD countries from 2000 to 2018, which is divided into the earliest (2000–2009) and the latest (2010–2018) periods. The econometric methodologies of this study employ panel cointegration, estimation procedures and vector error-correction modelling to investigate the potential interconnections between ICT, innovation development and economic growth. Findings - The results from the latest period illustrate that OECD countries have achieved positive and significant economic development from high ICT penetration, while results from the earliest period show that OECD countries were just beginning to enjoy the benefits of ICT penetration. Moreover, findings show that innovation development is highly significant in the latest period when promoting economic growth. Practical implications - The policy implications suggest that promoting ICT infrastructure establishment and expanding the innovation development may drive the process of economic development in OECD countries. Originality/value - This study employs mobile and Internet penetration as the development of telecommunication which is in line with the enlargement of innovation to foster economic growth in OECD countries. Comparing the evidence from two decades provides significant value for policymakers and decision-makers regarding the advantages of technology expansion and innovation development to promote economic growth in recent conditions.

Keywords: ICT; Innovation; Economic growth; OECD; Communication technology; Panel cointegration; Granger causality (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijsepp:ijse-05-2020-0321

DOI: 10.1108/IJSE-05-2020-0321

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