The impact of information and communication technology on economic growth: evidence from developed and developing countries

Abstract

This study examines whether, and to what extent, information and communication technology (ICT) has helped to improve economic growth. We adopt the traditional growth model as a framework to estimate contributions of labor, ICT, and non-ICT capital to economic growth in developed and developing countries. The estimates of the growth model by using time-series cross-country data of a total of 62 countries for the period of 2000–2006 reveal that economic growth effect of ICT differs across different income groups of countries. The paper concludes that ICT plays a major role in the growth of high and upper-middle income groups, but fails to contribute to the growth of the lower-middle income group countries. Such findings suggest that the level of investment in ICT is not the cause of slow growth in lower-middle developing countries as previously thought.