Abstract
This paper tests the impact of information and communications technology (ICT) on economic growth for ASEAN5+3 countries consisting of Malaysia, Thailand, Singapore, Indonesia, Philippines, Japan, Korea and China using panel data set from 1975 to 2006. In this paper, we investigate the impact of ICT on economic growth (GDP) based on standard production function consisting of capital (CAP) and labour (LAB) (number of employment as proxy of human capital), as independent variables. Telecommunications investment (TELINT) is used as a proxy to gauge the contribution of ICT as new independent variable to output growth in ASEAN5+3 countries. The study divided the ASEAN5+3 countries into two groups: ASEAN5 and ASEAN5+3 countries. We employ panel data set using various test such as panel unit root test, panel cointegration, Hausman test and generalised least squares method in order to detect the relationship between the dependent variable (GDP) and independent variables (CAP, LAB and TELINT) for ASEAN5+3 countries. The existence of long-run relationship between GDP and factor of production (capital, labour and telecommunications investment) is proven from the panel cointegration test for ASEAN5. Based on fixed effect for model 1 (ASEAN5) and random effect for model 2 (ASEAN5+3), the paper found out that labour, capital and telecommunications investment have positive relationship towards GDP. Thus, the study concludes that ICT has played an important role as engine of growth for sustainable development in ASEAN5 and ASEAN5+3 countries. In this context, ASEAN leader should take this opportunity from the formation of ASEAN5+3 to widen their cooperation with China, Japan and Korea throughout knowledge sharing especially in the area of ICT.
Similar content being viewed by others
References
Abramovitz M (1956) Resource and output trends in the United States since 1870. American Economic Review 46(2):5–23
APO (1990) Information Technology-Led Development. Asian Productivity Organization (APO), Tokyo
Arthur WB (1994) Increasing returns and path dependence in the economy. University of Michigan Press, Ann Arbor
Arthur WB (1996) Increasing returns and the new world of business. Harvard Business Review, July–August, pp.100–109
Baily MN (1986) What has happened to productivity growth? Science 234(4775):443–451
Baily MN, Gordon RJ (1988) The productivity slowdown, measurement issues and the explosion of computer power. Brookings Papers on Economic Activity 2:347–420
Bassanini A, Scarpetta S, Visco I (2000) Knowledge, technology and economic growth: recent evidence from OECD countries. OECD Economics Department working paper, no. 259. Organization for Economic Cooperation and Development, Paris
Berndt ER, Morrison CJ, Rosenblum LS (1992) High tech capital formation and labour composition in US manufacturing industries: An explanatory analysis. NBER working paper no. 4010
Bosworth B, Triplett J (2000) What’s new about the new economy? IT, economic growth and productivity. Brooking Institution. Available at: http://www.brook.edu/views/papers/bosworth/20001020.htm
Breitung J (2000) The local power of some unit root tests for panel data. In: Baltagi B (ed) Advances in econometrics, vol. 15: nonstationary panels, panel cointegration, and dynamic panels. JAI, Amsterdam, pp 161–178
Brynjolfsson E, Hitt L (1996) Paradox lost? Evidence on the returns to information systems spending. Management Science 42(4):541–558
Cardarelli R (2001) Is Australia a ‘new economy’? In: Australia: selected issues and statistical appendix, IMF country report no. 01/55. International Monetary Fund, Washington
Choi I (2001) Unit root tests for panel data. Journal of International Money and Finance 20:249–272
Datta A, Agarwal S (2004) Telecommunications and economic growth: a panel data approach. Applied Economics 36(14):1649–1654
Daveri F (2000) Is growth an information technology story in Europe too? IGIER working paper no. 168. Innocenzo Gasparini Institute for Economic Research, Milan
Dewan S, Kraemer KL (2000) Information technology and productivity: evidence from country-level data. Management Science 46(4):548–562
Dewan S, Min C (1997) The substitution of information technology for other factors of production: a firm-level analysis. Management Science 43(12):1660–1675
Engle RF, Granger CWJ (1987) Cointegrating and error correction: representation, estimation and testing. Econometrica 55:251–276
Erdil E, Turkcan B, Hakan Yetkiner I (2009) Does information and communications technologies sustain economic growth? The underdeveloped and developing countries case, working paper 09/01
Goldman S (2000) The IT revolution—new data on the global impact. Global Economics Weekly, October 18
Gordon RJ (2000) Does the ‘new economy’ measure up to the great inventions of the past? Journal of Economic Perspectives 14(Fall):49–74
Gujarati DN (1995) Basic econometric, 3rd edn. McGraw-Hill, New York
Hadri K (2000) Testing for stationarity in heterogeneous panel data. Econometric Journal 3:148–161
Hornik R (1990) Communications as complement in development. J Comm 30(2):10–24
Im KS, Pesaran MH, Shin Y (2003) Testing for unit roots in heterogeneous panels. Journal of Econometrics 115:53–74
I-Ways, Digest of Electronic Commerce Policy and Regulation (2005) vol 28, pp 191–196. IOS, Amsterdam
Jorgenson DW, Stiroh KJ (2000) Raising the speed limit: US economic growth in the Information Age. In: Brookings papers on economic activity: 1. Brookings Institution, Washington, DC, pp 161–167
Kendrick JW (1956) Productivity trends: capital and labor. Review of Economics and Statistics 38:248–257
Kraemer KL, Dedrick J (1999) Information technology and productivity: results and policy implications of cross-country studies, working paper: #PAC-144. Center for Research on Information Technology and Organizations, University of California, Irvine
Lau LJ, Tokutsu I (1992) The impact of computer technology on the aggregate productivity of the United States: an indirect approach, working paper. Department of Economics, Stanford University, Stanford
Lehr B, Lichtenberg F (1999) Information technology and its impact on firm level productivity: evidence from government and private data sources, 1977–1993. Canadian Journal of Economics 32:335–362
Levin A, Lin CF, Chu C (2002) Unit root tests in panel data: asymptotic and finite-sample properties. Journal of Econometrics 108:1–24
Lichtenberg FR (1995) The output contributions of computer equipment and personnel: a firm level analysis. Economics Innovations New Technology 3:201–217
Loveman GW (1988) An assessment of the productivity impact of information technologies, working paper no. 88-054. Management in the 1990s Project. MIT Sloan School, Cambridge
Maddala GS, Wu S (1999) A comparative study of unit root tests with panel data and a new simple test. Oxford Bulletin of Economics and Statistics 61:631–652
Matteucci N, O’Mahony C, Zwick T (2005) Productivity, workplace performance and ICT: industry and firm-level evidence for Europe and the US. Scottish Journal of Political Economy 521(3):359–386
Mody A, Dahlman C (1992) Performance and potential of information technology: an international perspective. World Development 20(12):1703–1719
Morrison CJ, Berndt ER (1991) Assessing the productivity of information technology equipment in US manufacturing industries, working paper 3582. National Bureau of Economic Research, Cambridge
Ng YC, Chang MK (2003) Impact of computerization on firm performance: a case of Shanghai manufacturing enterprises. Journal of the Operational Research Society 54:1029–1037
Niininen P (1998) Computers and economic growth in Finland, working paper: 148. UNU/WIDER, Helsinki
Oliner SD, Sichel DE (1994) Computers and output growth revisited: how big is the puzzle? Brookings Papers on Economic Activity 2:273–333
Oliner SD, Sichel DE (2000) The resurgence of growth in the late 1990s: is information technology the story. Journal of Economic Perspectives 14:3–22
Pedroni P (1999) Critical values for cointegration test in heterogeneous panels with multiple regressors. Oxford Bulletin of Economics and Statistics 61:653–670
Pedroni P (2004) Panel cointegration; asymptotic and finite sample properties of pooled times series tests with an application to the PPP hypothesis. Econometric Theory 20:597–625
Pilat D, Lee F (2001) Productivity growth in ICT-producing and ICT-using industries: a source of growth differentials in the OECD? STI working paper. OECD, Paris
Plice RK, Kraemer KL (2001) Measuring payoffs from information technology investments: new evidence from sector level data on developed and developing countries, working paper. Center for Research on Information Technology and Organizations, University of California at Irving, Irving
Poh KW (2001) Globalization and e-commerce: Growth and impacts in Singapore, CRITO working paper November: 11-01. Center for Research on Information Technology and Organizations, University of California at Irving, Irvine
Rahim SA, Pennings AJ (1987) Computerization and development in Southeast Asia. Asian Mass Communications Research and Information Center, Singapore
Roach S (1987) America’s technology dilemma: a profile of the information economy. Morgan Stanley, New York
Roller L-H, Waverman L (2001) Telecommunications infrastructure and economic development: a simultaneous approach. The American Economic Review 91(4):909–923
Romer PM (1990) Endogenous technological change. J Polit Econ 98(5), Part 2, Reprinted in Buchanan, J.M., and Yong, J.Y. (eds.), The return to increasing returns, Ann Arbor: University of Michigan Press, pp. 287–318.
Schumpeter JS (1939) Business cycles: a theoretical, historical and statistical analysis of the capitalist process. McGraw Hill, New York
Sichel DE (1997) The computer revolution: an economic perspective. Brookings Institution, Washington, DC
Solow RM (1957) Technical progress and the aggregate production function. Review of Economics and Statistics 39:312–320
Strassman P (1997) Computers are yet to make companies more productive. Computerworld, September 15
van Ark B (2001) The renewal of the old economy: an international comparative perspective. OECD Science, Technology and Industry working papers, 2001/5. OECD, Paris
Van Ark B, Inklaar R, McGuckin RH (2003) ICT and productivity in Europe and the United State: where do the difference come from? CESifo Economic Studies 49(3):295–318
Wong P (1994) Productivity impact of IT investment in Singapore. In: Proceedings International Conference on Information Systems, Vancouver, BC, December 14–17
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Ahmed, E.M., Ridzuan, R. The Impact of ICT on East Asian Economic Growth: Panel Estimation Approach. J Knowl Econ 4, 540–555 (2013). https://doi.org/10.1007/s13132-012-0096-5
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s13132-012-0096-5