Information and Communication Technology Externalities and Economic Growth in Newly Industrialized Countries

Maryam Farhadi () and Rahmah Ismail ()

Iranian Economic Review (IER), 2011, vol. 16, issue 3, 45-65

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. The aim of this research is to empirically study the external effects of ICT on economic growth by the endogenous production growth model, using panel data collected from newly industrialized countries (NICs) in the world namely Mexico, Brazil, China, India, South Korea, Malaysia, Singapore, Philippines, Thailand and Turkey over the period of 1990-2008. This paper indicates a considerable lags between the time of investing in these technologies and the time at which the externalities arise. The focus is on the possible network effects and spillovers emerging as externalities from investments in ICT. This study also shows that productivity obtained from ICT is larger than one would expect from a standard neoclassical growth accounting approach.

Keywords: Economic growth; Information and Communication Technology; Externality; globalization; Newly Industrialized Countries (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (2)

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