The effect of information and communication technology on economic growth high-income countries

Abstract

This study analyzes the influence of information and communication technology (ICT) and financial developments on the economic growth in high-income countries. This research uses the panel data regression method with a random effects model (REM) approach. The data were sourced from the World Bank and the International Telecommunication Union publications from 2001–2020. The results show that ICT (fixed telephone subscriptions, mobile/cellular telephone subscriptions, internet users and fixed broadband subscriptions) had no significant effect on economic growth. On the other hand, financial development (domestic credit to the private sector and stock market capitalization) had a significant effect on economic growth. Thus, indicators of financial development are better at promoting economic growth in high-income countries. Domestic credit to the private sector has a greater influence on economic growth compared to stock market capitalization. The research implications show that it is necessary to increase the contribution of financial development, such as facilitating access to credit to the real sector and increasing access to the capital market for economic actors to increase economic growth.