Internet User and Economic Growth: Empirical Evidence from Panel Data

Abstract

There has been an increasing interest among academicians pertaining to the relationship between internet user and economic growth. The adoption of internet creates effective platform of business trade that provides expediency and convenience in doing business globally and thus results in tremendous dependency on technology to expand business locally and internationally. Hence, the use of internet plays a crucial role in the economic development of a country and undoubtedly to a certain extent affects economic growth of a nation. This paper aims to examine the relationship between internet user and economic growth in seven selected Southeast Asia countries. Panel Autoregressive Distributed Lag (ARDL) (PMG) model is employed in examining the relationship between internet user and economic growth from year 1997 to 2013. Consistent with endogenous growth theory proposed by Romer (1986), this study reveals that internet user and trade positively and significantly affect the economic growth in selected Southeast Asia countries. The increase in the use of internet thus is philanthropic to the users and can lead to faster economic growth. Worldwide acceptance of this new information technology makes internet indubitably requires exceptional attention by promoting and encouraging its use particularly amongst individual users and enterprises to improve their standard of living and for the betterment of their countries in handling daily activities more effectively.