SOME DETERMINANTS AND MECHANICS OF ECONOMIC GROWTH IN MIDDLE-INCOME COUNTRIES: THE ROLE OF ICT INFRASTRUCTURE DEVELOPMENT, TAXATION AND OTHER MACROECONOMIC VARIABLES

Rudra P. Pradhan, Mak Arvin, Mahendhiran Nair (), Sara E. Bennett () and Sahar Bahmani ()
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Rudra P. Pradhan: Vinod Gupta School of Management, Indian Institute of Technology, Kharagpur, WB 721302, India
Mahendhiran Nair: School of Business and Global Asia in the 21st Century (GA21) Research Platform, Monash University Malaysia, Jalan Lagoon Selatan - 47500, Malaysia
Sara E. Bennett: College of Business, University of Lynchburg, Lynchburg, VA 24501, USA
Sahar Bahmani: Department of Business, University of Wisconsin-Parkside, Kenosha, Wisconsin 53144, USA

The Singapore Economic Review (SER), 2024, vol. 69, issue 01, 297-333

Abstract: This study examines key factors in the economic growth of middle-income countries over the period 1970–2017. The variables considered are ICT infrastructure development, taxation revenue, government expenditure, gross capital formation, foreign direct investment, and inflation. This study considers interlinkages between the macroeconomic variables noted above. The purpose of this study is to determine: (1) if there is causality between the variables and (2) the direction of any causality. Using a panel vector error-correction model, we find both short-run and long-run relationships between the variables. In each specification, we find that ICT infrastructure development, taxation revenue and the four macroeconomic variables all stimulate economic growth in the long run. This suggests that policymakers should curate an integrated and holistic policy framework pertaining to taxation, ICT infrastructure development and other macroeconomic policies to create a vibrant national economic ecosystem that would ensure the sustained economic growth of middle-income countries.

Keywords: ICT infrastructure development; taxation; economic growth; middle-income countries (search for similar items in EconPapers)
JEL-codes: E61 O47 O50 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1142/S0217590820500563

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