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Contribution of ICT to the Chinese Economic Growth

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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.

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  • Heshmati, Almas & Yang, Wanshan, 2006. "Contribution of ICT to the Chinese Economic Growth," Ratio Working Papers 91, The Ratio Institute.
    • Handle: RePEc:hhs:ratioi:0091
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    Cited by:

    1. Khurram Shehzad & Umer Zaman & Ana Ercília José & Emrah Koçak & Paulo Ferreira, 2021. "An Officious Impact of Financial Innovations and ICT on Economic Evolution in China: Revealing the Substantial Role of BRI," Sustainability, MDPI, vol. 13(16), pages 1-17, August.
    2. Krume Nikoloski & Vlatko Paceskoski, 2015. "Contemporary Trends In The World Trade," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 6, pages 21-26, December.
    3. Lange, Steffen & Pohl, Johanna & Santarius, Tilman, 2020. "Digitalization and energy consumption. Does ICT reduce energy demand?," Ecological Economics, Elsevier, vol. 176(C).
    4. Li, Qing & Wu, Yanrui, 2020. "Intangible capital, ICT and sector growth in China," Telecommunications Policy, Elsevier, vol. 44(1).
    5. Qing Li & Yanrui Wu, 2023. "ICT, technological diffusion and economic growth in Chinese cities," Empirical Economics, Springer, vol. 64(4), pages 1737-1768, April.
    6. Yongming Huang & Jamal Khan, 2022. "Has the information and communication technology sector become the engine of China’s economic growth?," Review of Development Economics, Wiley Blackwell, vol. 26(1), pages 510-533, February.
    7. Almas Heshmati & Biwei Su, 2013. "Development and Sources of Labor Productivity in Chinese Provinces," China Economic Policy Review (CEPR), World Scientific Publishing Co. Pte. Ltd., vol. 2(02), pages 1-30.
    8. Shiu, Alice & Heshmati, Almas, 2006. "Technical Change and Total Factor Productivity Growth for Chinese Provinces: A Panel Data Analysis," Ratio Working Papers 98, The Ratio Institute.
    9. Jin, Canyang & Xu, Aiting & Zhu, Yuhan & Li, Jinchang, 2023. "Technology growth in the digital age: Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 187(C).
    10. Qianwang Deng & Xiahui Liu & Haolan Liao, 2015. "Identifying Critical Factors in the Eco-Efficiency of Remanufacturing Based on the Fuzzy DEMATEL Method," Sustainability, MDPI, vol. 7(11), pages 1-21, November.

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    More about this item

    Keywords

    Productivity paradox; ICT; economic development; TFP growth; China;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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