Dynamic linkages between diffusion of Information Communication Technology and labour productivity in South Asia

Abstract

At present, diffusion of Information Communication Technology (ICT) is a significant area of concern for sustainable development and growth of a country. Regions with abundant labour such as South Asia require significant improvements in the diffusion of ICT to achieve higher productivity for their labour, which in turn can increase the pace of economic growth. In this context, the objective of this study is to investigate whether ICT could be used to improve labour productivity for countries in South Asia. This study first investigates the general status of diffusion of ICT among South Asian countries. The initial results based on descriptive statistics indicate that there is a significant gap among the South Asian countries, with Maldives having the highest ICT facilities. Second, using robust panel data methodologies, this study concludes that South Asia’s drive for higher productivity of its abundant labour force can substantially be improved in the long-run by increasing diffusion of ICT in the presence of trade openness as well as domestic capital formulation.