Contribution of ICT to the Chinese Economic Growth

Almas Heshmati () and Wanshan Yang

No 91, Ratio Working Papers from The Ratio Institute

Abstract: The view about systematic irrationality of investors and managers in investment with reference to information and communication technology (ICT) with no effects on productivity growth is called productivity paradox. Research suggests that ICT return in developed nations is significant and positive, but not in developing countries. This paper challenges the above conclusion by examining the contribution of ICT to the Chinese economic growth. We investigate the relationship between TFP growth and ICT capital and provide estimation of the returns to ICT investment. The contribution of ICT to economic growth has not been studied earlier for the developing countries like China. The empirical results suggest that China has reaped the benefits of ICT investment. The policy implications for the Chinese ICT investment and development are also discussed. The results add to our understanding of how ICT affects growth in the context of economic development.

Keywords: Productivity paradox; ICT; economic development; TFP growth; China (search for similar items in EconPapers)
JEL-codes: D24 E22 O47 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2006-04-25
New Economics Papers: this item is included in nep-cna, nep-eff, nep-ino, nep-mac, nep-sea and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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