Impacts of Information and Communication Technologies infrastructure development on economic growth: An empirical study of Southeast Asian countries

Abstract

This article aims to systemize growth models and analyze the impacts of Information and Communication Technologies (ICT) infrastructure development on the economic growth of Southeast Asian countries. Accordingly, growth models are developed with ICT inputs, including mobile cellular subscriptions, fixed telephone subscriptions, fixed broadband subscriptions, and Internet users. Using data from World Bank, the author collected 220 observations of 10 ASEAN members during the 2000-2021 period. To evaluate how ICT infrastructure factors affect the economies, the author used various panel analysis and estimation methods: Panel unit-root test, panel cointegration test, and the Generalized Method of Moments (GMM) estimator. The results showed that all the variables were stationary and had cointegration relationships. Additionally, the Ramsey test results showed that there were no omitted variables in the models, which proved the fitness of the models. The study found that 3 ICT variables significantly improved economic growth: mobile cellular subscriptions, fixed broadband subscriptions, and Internet users; while fixed telephone has negative effects on the sample. The author also found that economic growth is significantly improved by labor force, gross fixed capital formation, and trade openness. Theoretically, this article built a growth equation with a vector of different ICT factors, including Mobile cellular subscriptions, fixed telephone subscriptions, fixed broadband subscriptions, and Internet users. Furthermore, when using the system GMM estimator which controls bias such as endogeneity, heteroskedasticity and auto correlation, effects of explanatory variables on economic growth were significant. Practically, the research results provided an overview of the contributions of ICT factors to Southeast Asian economies, which are consistent with the current situation of ICT development in the region. From these results, the article gave policy implications for Vietnam in developing ICT aspects as well as in applying ICT in socio-economic activities.