Impact of ICT diffusion and financial development on economic growth in developing countries

Artikel

Purpose - The present study aimed to examine the relationship between information and communication technologies (ICT) diffusion, financial development and economic growth in the panel of developing countries for 2005-2019. Design/methodology/approach - The study employed the principal component analysis (PCA) to extract the index of ICT diffusion. First-generation panel unit root tests such as Levine Lin Chu (LLC), Im Pesaran Shin (IPS), Augmented Dickey-Fuller (ADF) and Phillips and Perron (PP) were employed to check the stationarity of the variables. Pedroni and Kao co-integration techniques were used to examine the existence of the long-run relationship, and co-integration coefficients were estimated using FMOLS and dynamic ordinary least squares (DOLS). The panel Granger causality approach examined the short-run and long-run causality. Findings - The results confirmed that ICT diffusion, financial development and trade openness accelerate growth, whereas inflation dampens economic growth. Further, the causality test showed bidirectional causality between ICT growth and financial development growth but a unidirectional causality from financial development to ICT diffusion in developing countries. Originality/value - The study recommends synchronizing public and private sector investment for a synergistic effect on ICT infrastructure and adequate investment in the financial sector to increase the growth rate in developing countries. Economic policies should be adopted toward incentives and subsidies to ensure affordable ICT services for disadvantaged communities. Also, training programs focussing on enhancing digital literacy to enable all segments of the population to use digital platforms for financial services are recommended.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Journal of Economics, Finance and Administrative Science ; ISSN: 2218-0648 ; Volume: 28 ; Year: 2023 ; Issue: 55 ; Pages: 27-43

Classification and Topics

• Classification: Wirtschaft ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models ; Macroeconomic Analyses of Economic Development ; Technological Change: Choices and Consequences; Diffusion Processes ; Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
• Subject: Developing countries ; ICT diffusion ; Financial development ; Economic growth ; Panel data ; FMOLS ; DOLS

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Verma, Anushka ; Dandgawhal, Prajakta Sandeep ; Giri, Arun Kumar
• Event: Veröffentlichung
• (who): Emerald Publishing Limited
• (where): Bingley
• (when): 2023

Further information

• DOI: doi:10.1108/JEFAS-09-2021-0185
• Last update: 10.03.2025, 11:44 AM CET