Over the past few decades the brisk development of information and communication technologies (ICT) has had a phenomenal impact on the economic stability and development of many countries. Empirical studies show that most developed economies have gained significant payoffs (in terms of economic growth) from their ICT investments. This study investigates the hypothesis that ICT-based investment has paid off for Australia and the ASEAN-5 countries (Malaysia, Singapore, Indonesia, Thailand and the Philippines) between 1992 and 2006. Applying a new cointegration technique[12], which takes into account the presence of a potential structural break, shows that ICT investment has had a positive and significant long-run relationship with economic growth in Australia, Malaysia and Singapore. However, in Indonesia, the Philippines and Thailand ICT investment did not contribute significantly to economic growth during the same period. These three countries have yet to reap the benefits of ICT. Our empirical results suggest that the three lagging ASEAN countries should increase their ICT investment in order to achieve sustainable economic growth in the new knowledgebased economy.

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