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The Effects of Information Communication Technology on Stock Market Capitalization: A Panel Data Analysis

Sang Lee (), Matthew Alford (), John Cresson () and Lara Gardner ()

Business and Economic Research, 2017, vol. 7, issue 1, 261-272

Abstract: The level of investment in information communication technologies (ICT) that may affect stock market capitalization varies substantially across countries. Using data on 81 countries from 1998 to 2014, we use a country-fixed effects model to estimate the relationship between ICTs and stock market capitalization. Our empirical model is built on the premise that (1) increased deployment of ICT allows financial market participants to make more informed decisions at reduced inherent risks associated with deficient information or uncertainty in financial markets; and (2) increased access to and use of information communication technologies is expected to improve a country's economic fundamentals. The empirical results support our hypothesis that ICT expansions are positively associated with stock market capitalization.

Keywords: Information communication technology; Stock market capitalization; Economic growth (search for similar items in EconPapers)
JEL-codes: R00 Z0 (search for similar items in EconPapers)
Date: 2017
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