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Does Information and Communication Technology Sustain Economic Growth? The Underdeveloped and Developing Countries Case


  • Erkan Erdil

    () (Department of Economics, Middle East Technical University)

  • Burcu Turkcan

    (Department of Economics, Ege University)

  • I. Hakan Yetkiner

    () (Department of Economics, Izmir University of Economics)


This paper tests the impact of ICT on economic growth for underdeveloped and developing countries by using a panel dataset for the period of 1995-2006. We first develop the theory of the relationship between ICT and economic growth. We show that ICT-capital has a positive effect both on long-run and transitional income per capita, if it is considered as a factor of production. Next, we estimate a panel data set with 131 underdeveloped and developing countries under the assumption that ICT is one of the determining factors of economic growth. We find that ICT has positive and significant effect on economic growth even after the use of some control variables.

Suggested Citation

  • Erkan Erdil & Burcu Turkcan & I. Hakan Yetkiner, 2009. "Does Information and Communication Technology Sustain Economic Growth? The Underdeveloped and Developing Countries Case," STPS Working Papers 0903, STPS - Science and Technology Policy Studies Center, Middle East Technical University, revised Nov 2009.
  • Handle: RePEc:met:stpswp:0903

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    References listed on IDEAS

    1. Bresnahan, Timothy F. & Trajtenberg, M., 1995. "General purpose technologies 'Engines of growth'?," Journal of Econometrics, Elsevier, vol. 65(1), pages 83-108, January.
    2. David, Paul A, 1990. "The Dynamo and the Computer: An Historical Perspective on the Modern Productivity Paradox," American Economic Review, American Economic Association, vol. 80(2), pages 355-361, May.
    3. Lars-Hendrik Roller & Leonard Waverman, 2001. "Telecommunications Infrastructure and Economic Development: A Simultaneous Approach," American Economic Review, American Economic Association, vol. 91(4), pages 909-923, September.
    4. Hardy, Andrew P., 1980. "The role of the telephone in economic development," Telecommunications Policy, Elsevier, vol. 4(4), pages 278-286, December.
    5. Matti Pohjola, 2002. "The New Economy in Growth and Development," Oxford Review of Economic Policy, Oxford University Press, vol. 18(3), pages 380-396.
    6. Andrea Bassanini & Stefano Scarpetta, 2002. "Growth, Technological Change, and ICT Diffusion: Recent Evidence from OECD Countries," Oxford Review of Economic Policy, Oxford University Press, vol. 18(3), pages 324-344.
    7. Bart van Ark & Robert Inklaar & Robert H. McGuckin, 2003. "ICT and Productivity in Europe and the United States Where Do the Differences Come From?," CESifo Economic Studies, CESifo, vol. 49(3), pages 295-318.
    8. Norton, Seth W, 1992. "Transaction Costs, Telecommunications, and the Microeconomics of Macroeconomic Growth," Economic Development and Cultural Change, University of Chicago Press, vol. 41(1), pages 175-196, October.
    9. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    10. Nicola Matteucci & Mary O'Mahony & Catherine Robinson & Thomas Zwick, 2005. "Productivity, Workplace Performance And Ict: Industry And Firm-Level Evidence For Europe And The Us," Scottish Journal of Political Economy, Scottish Economic Society, vol. 52(3), pages 359-386, July.
    11. Pohjola, Matti, 2002. "New Economy in Growth and Development," WIDER Working Paper Series 067, World Institute for Development Economic Research (UNU-WIDER).
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    Cited by:

    1. Chang Woon Nam & Sumin Nam & Peter Steinhoff, 2017. "Modi's 'Make in India' Industrial Reform Policy and East Asian Flying-Geese Paradigm," CESifo Working Paper Series 6431, CESifo Group Munich.

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    ICT; economic growth; panel data; GMM;


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