Do the Developments in Telecommunication Leads to the Solow Paradox on Economic Growth in Turkey?

Abstract

Telecommunications infrastructure is critical not only for domestic growth, but also for combining credit with international commodity and financial markets, such as the smooth flow of foreign investment, facilitating the positive value of net exports, and increasing the added value in the economy's GDP. In this study, fixed telephone lines in the period since the Republic of Turkey, is to investigate whether mobile phone and affect the economic growth of the telecommunications sector showing growth in internet connection. In our study, the penetration rate represents the development of telecommunications industry. Penetration rate is defined as the number of fixed line and mobile phone subscribers per 100 people. In order to measure the penetration rate in Turkey, we have used the ratio of the total number of fixed line, mobile subscribers and internet users to the population, taking into account the dates when mobile communication and the internet started. Economic growth is represented as the rate of change to Gross Domestic Product. The data used in this study cover an annual period 1935-2017. After investigating the stationarity of the series of variables, a causal relationship between the Toda-Yamamoto causality test and the penetration rate and GDP change rate series was examined. The findings of the analysis, the development of telecommunications in Turkey revealed that does not affect economic growth. According to this result, the Solow paradox is valid in the period examined in Turkey.