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

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  • Sang Lee
  • Matthew Alford
  • John Cresson
  • Lara Gardner

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.

Suggested Citation

  • Sang Lee & Matthew Alford & John Cresson & Lara Gardner, 2017. "The Effects of Information Communication Technology on Stock Market Capitalization: A Panel Data Analysis," Business and Economic Research, Macrothink Institute, vol. 7(1), pages 261-272, June.
    • Handle: RePEc:mth:ber888:v:7:y:2017:i:1:p:261-272
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    References listed on IDEAS

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    Cited by:

    1. Sahar Afshan & Arshian Sharif & Abdelmohsen A. Nassani & Muhammad M. Q. Abro & Rubeena Batool & Khalid Zaman, 2021. "The role of information and communication technology (internet penetration) on Asian stock market efficiency: Evidence from quantile‐on‐quantile cointegration and causality approach," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(2), pages 2307-2324, April.
    2. Marszk, Adam & Lechman, Ewa, 2019. "New technologies and diffusion of innovative financial products: Evidence on exchange-traded funds in selected emerging and developed economies," Journal of Macroeconomics, Elsevier, vol. 62(C).

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    More about this item

    Keywords

    Information communication technology; Stock market capitalization; Economic growth;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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