Impact of Information and Communication Technology Infrastructure on Economic Growth: An Empirical Assessment for the EU Countries

Elena Toader,Angela Roman,Sorin Anton,Bogdan Firtescu

doi:10.3390/su10103750

Abstract

The accelerated development of information and communication technology (ICT) over the past two decades has encouraged an increasing number of researchers to examine and measure the impact of this technology on economic growth. Our study aims to identify and evaluate the effect of using ICT infrastructure on economic growth in European Union (EU) countries for a period of 18 years (2000–2017). Using panel-data estimation techniques, we investigate empirically how various indicators of ICT infrastructure affect economic growth, proxied in our study by GDP per capita. Within the estimates, we have included some macroeconomic control variables. Our results indicate a positive and strongly effect of using ICT infrastructure on economic growth in the EU member states, but the magnitude of the effect differs depending on the type of technology examined. Regarding the impact of macroeconomic factors, our estimates indicate that inflation rate, unemployment rate, the degree of trade openness, government expenditures, and foreign direct investments would significantly affect GDP per capita at EU level. The findings are broadly similar to the theoretical predictions, but also to the findings of some relevant empirical studies. Our research reveals that ICT infrastructure, along with other macroeconomic factors, is an important driver of economic growth in EU countries.

Highlights

Significant development of information and communication technology (ICT) over the past two decades has encouraged many researchers to investigate its economic implications, notably the contribution of ICT to increasing productivity, promoting economic growth, and reducing poverty
To select the model that best describe the effect of using ICT infrastructure on economic growth, we have checked the regression assumptions and have performed several tests suggested by econometric literature [61]
We point out that the positive and strong impact of ICT infrastructure on economic growth is found in the conditions in which we have analyzed each type of technology separately and have calculated first-difference models

Summary

Introduction

Significant development of information and communication technology (ICT) over the past two decades has encouraged many researchers to investigate its economic implications, notably the contribution of ICT to increasing productivity, promoting economic growth, and reducing poverty. Most studies in the field have indicated that information and communications technology is a key factor in the economic and social development of the countries because it has positive effects on economic growth, productivity, and employment. International organizations such as the United Nations, the International Telecommunications Union, the OECD, and the World Bank argue that the ICT sector is a key driver of sustainable development. In accordance with Pradhan et al [4], information and communication technology infrastructure refers to “digital telephone network, mobile phones, Internet capability, Internet servers and fixed broadband, and other technologies”

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Conclusion