Unlocking the Synergy: ICT, Global Trade, and Growth in the GCC Region - A Panel-Causality Analysis

Abstract

This study investigates the intricate relationship between Information and Communication Technology (ICT), global trade, and economic growth in the Gulf Cooperation Council (GCC) region over the period 1990–2022. The study Utilize a panel data framework covering the GCC member states over a significant time span, and employing an advanced econometric technique to assess the causal and cointegrated relationships among these key variables. Three tests, [1], [2], [2] Cointegration tests are applied to check for Cointegration. Additionally, fully modified least square (FMOLS) and dynamic ordinary least square (DOLS) will be used to test the magnitude of the long relationship among variables. The analysis integrates a comprehensive dataset that includes ICT indicators, trade flows, and macroeconomic variables, allowing for a robust examination of the synergy among these critical elements. The results reveal multifaceted relationships within the GCC context. While ICT is found to have a positive and significant impact on global trade and economic growth, the study also identifies bidirectional causality between ICT and global trade, indicating a reinforcing loop. Furthermore, evidence suggests that global trade plays a pivotal role in enhancing ICT diffusion within the region. The findings of this paper have several ramifications. First, they highlight the necessity for GCC governments to give priority to digitization and ICT infrastructure development activities in order to promote international commerce and economic diversification. Second, Policymakers should also consider crafting trade policies that facilitate the exchange of ICT-related goods and services, further fostering economic growth.