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Does ICT capital affect economic growth in the EU-15 and EU-12 countries?

Author

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  • Jana Hanclova
  • Petr Doucek
  • Jakub Fischer
  • Kristyna Vltavska

Abstract

The paper examines economic growth in old and new member countries of the European Union (EU-15 and EU-12) during the years of 1994-2000 and 2001-2008 mainly due to changes in information and communication technology (ICT) capital development. The first group EU-15 is presented by old EU countries and the second group EU-12 is presented by new member countries that joined the EU in 2004-2007. The threefactor Cobb-Douglas production function is estimated through the panel general least squares method. The input factors that might influence the economic growth are labour, ICT capital services and non-ICT capital services. Since ICT capital growth data are not available for all selected economies, the groups of countries were reduced to EU-14 and EU-7. The estimated panel production functions confirmed that the average growth of GDP in the EU-7 countries was supported by the stable growth of labour quantity and ICT-capital and increasing total factor productivity. A short-term drop in non-ICT capital growth with follow-up stagnation was caused rather by lower labour productivity. The research discovered that the drop in GDP growth in the EU-14 countries was a result of the slower growth of non-ICT capital and total factor productivity and the stagnated growth of ICT capital with low elasticity, and showed that even the compensation of growth in labour quality did not prevent a decrease in total factor productivity and economic growth.

Suggested Citation

  • Jana Hanclova & Petr Doucek & Jakub Fischer & Kristyna Vltavska, 2015. "Does ICT capital affect economic growth in the EU-15 and EU-12 countries?," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 16(2), pages 387-406, April.
    • Handle: RePEc:taf:jbemgt:v:16:y:2015:i:2:p:387-406
    DOI: 10.3846/16111699.2012.754375
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    Citations

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    Cited by:

    1. Martha Jiménez García, 2019. "The Impact of Information and Communication Technologies on Economic Growth in Mexico," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 9(2), pages 11-22, February.
    2. Anupam Das & Murshed Chowdhury & Sariah Seaborn, 2018. "ICT Diffusion, Financial Development and Economic Growth: New Evidence from Low and Lower Middle-Income Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 9(3), pages 928-947, September.
    3. Bakry, Walid & Nghiem, Xuan-Hoa & Farouk, Sherine & Vo, Xuan Vinh, 2023. "Does it hurt or help? Revisiting the effects of ICT on economic growth and energy consumption: A nonlinear panel ARDL approach," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 597-617.
    4. Ngozi Adeleye & Chiamaka Eboagu, 2019. "Evaluation of ICT development and economic growth in Africa," Netnomics, Springer, vol. 20(1), pages 31-53, April.
    5. Stanislava Mildeová & Antonín Dvořák & Pavel Zahradníček, 2016. "Information Framework of Critical Infrastructure [Informační rámec kritické infrastruktury]," Acta Informatica Pragensia, Prague University of Economics and Business, vol. 2016(2), pages 180-191.
    6. Dr. Cesar R Salas-Guerra, 2021. "Impact of digital economic activity on regional economic growth: A Case study from northern Minas Gerais between 2009 To 2018," Papers 2105.02849, arXiv.org.
    7. Hoda Mansour, 2022. "The impact of ICT capital growth on economic growth: the case of Egypt," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 40(2), pages 375-394.
    8. Zhang, Zhouyi & Song, Yi & Cheng, Jinhua & Zhang, Yijun, 2023. "Effects of heterogeneous ICT on critical metal supply: A differentiated perspective on primary and secondary supply," Resources Policy, Elsevier, vol. 83(C).
    9. Gouvea, Raul & Kapelianis, Dimitri & Kassicieh, Sul, 2018. "Assessing the nexus of sustainability and information & communications technology," Technological Forecasting and Social Change, Elsevier, vol. 130(C), pages 39-44.
    10. Vrontis, Demetris & Morea, Donato & Basile, Gianpaolo & Bonacci, Isabella & Mazzitelli, Andrea, 2021. "Consequences of technology and social innovation on traditional business model," Technological Forecasting and Social Change, Elsevier, vol. 170(C).
    11. Monica RĂILEANU SZELES & Carmen ANTON & Mirela BABA & Steliana BUSUIOCEANU & Adriana LITRĂ & Titus SUCIU, 2019. "Explaining The EU Regional Economic Growth upon Regional- and Country- Level Achievements in Education," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 143-157, March.
    12. Muazu Ibrahim & Yakubu Awudu Sare & Ibrahim Osman Adam, 2021. "An application of frequency domain approach to the causal nexus between information, communication and technology infrastructure and financial development in selected countries in Africa," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(1), pages 1206-1235, January.
    13. Izabela Mlynarzewska- Borowiec, 2021. "Direct and Indirect Impact of ICT on EU’s Productivity Growth," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 4), pages 278-287.
    14. Martha Jiménez García, 2019. "The Impact of Information and Communication Technologies on Economic Growth in Mexico," International Journal of Business and Social Research, LAR Center Press, vol. 9(2), pages 11-22, February.
    15. Miloš Žarković & Slobodan Lakić & Jasmina Ćetković & Bojan Pejović & Srdjan Redzepagic & Irena Vodenska & Radoje Vujadinović, 2022. "Effects of Renewable and Non-Renewable Energy Consumption, GHG, ICT on Sustainable Economic Growth: Evidence from Old and New EU Countries," Sustainability, MDPI, vol. 14(15), pages 1-27, August.

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