Abstract
This study investigates the role of Information and Communication Technologies (ICT) investment and diffusion on Pakistan’s economic growth by proposing the threshold level of ICT investment. At our proposed level, the ICT imports significantly enhance the intermediate inputs to capital goods, ultimately enhancing economic growth. For this empirical investigation, we use the maximum available data on technological innovation and investment, ranging from 2003 to 2018. Incorporating the structural breaks, the results of regression analysis reveal that Pakistan’s economic growth is unaffected by ICT development. However, we observe the mixed shreds of evidence on the ICT investment. Following existing literature, we use ICT goods exports and imports as a proxy for ICT investment. Interestingly, the economic growth of Pakistan is again unaffected by the ICT goods exports. However, we observe that a one percent increase in ICT goods imports enhances economic growth by 1.73 percent. Then, we extend this analysis to the threshold approach, which reveals that ICT imports affect the overall economic growth when the ICT goods imports reach the level of 4.13 percent of the total imports. At this threshold, the ICT goods import significantly enhances the intermediate input to the capital goods, leading to higher economic growth. Therefore, the policymakers should ensure that the ICT goods import must be greater than the 4.13 percent of Pakistani imports.
Highlights
Technological innovations play a significant role in the economic development of any economy (Kuznets 1978); this role is not a smooth process (Field 2006).History reveals that the transmission, innovation, or the collapse of the latest technologies accelerates or decelerates the economic growth abruptly
Jarque-Bera Test where it affects the intermediate input in the production process
Test to 2018, the regression analysis revealed that Information and Communication Technologies (ICT) diffusion does not affect Pakistan’s ecoNote
Summary
Approach for the Empirical Evidence from Pakistan. International Journal of and Carlo Pugnetti 5, *.
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