Does information and communications technology affect economic growth? Empirical evidence from SAARC countries

ABSTRACT

This study investigates the impact of Information and Communications Technology (ICT) on economic growth (gross domestic product) for member countries of South Asian Association for Regional Cooperation (SAARC) using annual data for the period 1990–2014. The study has employed augmented Cobb–Douglas production function by incorporating ICT along with capital and labor. We have taken teledensity (number of fixed and mobile phones per 10,000 people) as the proxy of ICT. This study has included only four SAARC countries (Bangladesh, India, Sri Lanka, and Pakistan) due to data constraints. Our findings reveal a positive and statistically significant effect of ICT on economic growth using panel data techniques. However, the impact of ICT on economic growth is highest for India followed by Sri Lanka, Bangladesh, and Pakistan respectively. This study has crucial policy implications for SAARC countries as they have started giving due significance to the issues related to ICT these years.

KEYWORDS:

• ICT
• information and communication technology
• economic growth
• panel data
• SAARC
• South Asia

JEL CLASSIFICATION:

• L86
• O47
• C33
• G38

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes on contributors

Manas Tripathi works as an Assistant Professor in the area of Management Information Systems at Indian Institute of Management (IIM) Rohtak. He is a Fellow in Management (Doctoral level program) of Indian Institute of Management Lucknow in the Information Technology & Systems area. Prior to joining IIM Lucknow, he has worked as a software engineer in software product based company. He has obtained his Bachelor of Technology (B.Tech.) degree in Information Technology from H.B.T.I. Kanpur. Prior to joining IIM Rohtak, he has also worked as an Assistant Professor in Information Systems area at Jindal Global Business School, O.P. Jindal Global University, Sonipat, Haryana. He has published articles in journals, conferences, and magazine of international repute. His research interests include; business value of IT; business focused predictive analytics; IT risk and IT governance; IT Strategy and ICT in Emerging Economies. He can be reached at [email protected]

Sarveshwar Kumar Inani is an Assistant Professor of Finance and Accounting area at Jindal Global Business School, O.P. Jindal Global University of Haryana (India). He holds double master’s degree, i.e. Master of Business Administration in Finance and Master of Commerce in Accountancy and Business Statistics. He holds Ph.D. in Finance and Accounting from Indian Institute of Management-Lucknow. His research interests are focused primarily on price discovery and volatility spillover in financial markets. He has been writing papers in the domains of Finance and Economics. He has published research papers on the price discovery role of futures contracts in Indian capital market and commodity market in international journals of repute. Prior to join as a faculty member at O.P. Jindal Global University, he has served as assistant professor in Mody University (Lakshmangarh, Rajasthan). He is a lifetime member of the Indian Econometric Society. He can be reached at [email protected].

Notes

1 Source:http://www.saarc-sec.org/userfiles/Summit%20Declarations/09%20-%20Maldives%20-%209th%20Summit%201997.pdf [accessed on November 23, 2015].

2 Source:http://www.saarc-sec.org/userfiles/Summit%20Declarations/10%20-%20Colombo%20%2010th%20Summit%201998.pdf [accessed on November 18, 2015].

3 Source: http://www.saarc-sec.org/userfiles/Summit%20Declarations/Kathmandu-18thSummit26-27Nov2013.pdf [accessed on November 20, 2015].

4 For the year 2014, fixed capital formation value for Sri Lanka and labor values for all countries were missing, which were replaced by their linear trend values.

5 Source: The Economic Times, Aug 16, 2012 (http://articles.economictimes.indiatimes.com/2012-08-16/news/33232949_1_telecom-equipment-indian-ipr-telecom-market) [accessed on November 21, 2015].

6 Source: The Space Review, August 18, 2014 (http://www.thespacereview.com/article/2579/1) [accessed on November 23, 2015].