Revisiting the Nexus between Digital Economy and Economic Prosperity: Evidence from a Comparative Analysis
Main Article Content
Keywords
Digitalization, Economic growth, Impact, Generalized moments method, Economic Prosperity
Abstract
In this paper, we try to investigate the contribution of digitalization on economic growth in both developed and developing countries over the period 1990-2020. For this end, different econometric tools are applied on a panel dataset. Overall, we show that the digital technologies seem to significantly and positively affect economic growth in both groups of countries. The digitalization impact level tends to differ across countries. Our empirical results also display that the short- and long-term relationship between information and communication technologies and economic growth is well documented. Such results can be useful for policymakers to enhance the digital economy and provide novel channels to develop adequate policies and promote new institutions. So, benefits from digitalization can lead to realize substantial economic growth.
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References
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Pradhan, R. P., Arvin, M. B., & Norman, N. R. (2015). Dynamics of information and communications technologies infrastructure, economic growth, and financial development: Evidence from Asian countries, Technology in Society, 42, 135–149. https://doi.org/10.1016/j.techsoc.2015.04.002
Pradhan, R. P., Mallik, G., & Bagchi, T. P. (2018). Information communication technology (ICT) infrastructure and economic growth: A causality evinced by cross-country panel data, IIMB Management Review, 30(1), 91–103. https://doi.org/10.1016/j.iimb.2018.01.001
Qiang, C. Z.-W., & Rossotto, C. M. (2009). Economic impacts of broadband. In Information and Communications for Development, Extending Reach and Increasing Impact, World Bank, Washington D.C, pp. 35–50. Available at https://documents1.worldbank.org/curated/en/645821468337815208/pdf/487910PUB0EPI1101Official0Use0Only1.pdf
Roller, L., & Waverman, L. (2001). Telecommunications infrastructure and economic development: A simultaneous approach. American Economic Review, 91, 909–923.
Samimi, J. A., Ledary, R. B., & Samimi, J. F. (2015). ICT & economic growth: A comparison between developed & developing countries. International Journal of Liability and Scientific Enquiry, 1, 26–32.
Sassi, S., & Mohamed, G. (2013). Financial development, ICT diffusion and economic growth: lessons from MENA region, Telecommunications Policy, 37, 252–261.
Solomon, E.M., & van Klyton, A. (2020). The impact of digital technology usage on economic growth in Africa, Utilities Policy, 67, 1-19. https://doi.org/10.1016/j.jup.2020.101104
Thompson, H., & Garbacz, C. (2011). Economic impacts of mobile versus fixed broadband. Telecommunications Policy, 35, 999–1009.
Vasylieva, T., Lyulyov, O., Bilan, Y. & Streimikiene, D. (2019). Sustainable Economic Development and Greenhouse Gas Emissions: The Dynamic Impact of Renewable Energy Consumption, GDP, and Corruption. Energies, 12, 3289.
Ward, M. R., & Zheng, S. (2016). Mobile telecommunications service and economic growth: Evidence from China. Telecommunications Policy, 40, 89–101.
Yousefi, A. (2011). The impact of Information and Communication Technology on Economic Growth: Evidence from Developed and Developing Countries. Economics of Innovation and New Technology, 20(6), 581-596. https://doi.org/ 10.1080/10438599.2010.544470
Aghaei, M., & Rezagholizadeh, M. (2017). The impact of information and communication technology (ICT) on economic growth in the OIC Countries, Economic and Environmental Studies, 17(2) [42], 257–278. https://doi.org/10.25167/ees.2017.42.7
Anderson, T. W., & Hsiao, C. (1982). Formulation and estimation of dynamic models using panel data. Journal of Econometrics, 18, 47-82.
Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. Review of Economic Studies, 58, 277–297.
Arias, F. (2006). Desarrollo sostenible y sus indicadores [Sustainable development and its indicators]. Revista sociedad y economía, 11, 200–229.
Armeanu, D.S., Vintil?, G. & Gherghina, S. C. (2018). Empirical study towards the drivers of sustainable economic growth in EU-28 countries. Sustainability, 10, 1-23.
Bahrini, R., & Qaffas, A. A. (2019). Impact of Information and Communication Technology on Economic Growth: Evidence from Developing Countries, Economies, 7, 1–13. https://doi.org/10.3390/economies7010021
Ben Youssef, A., Boubaker, S., Dedajc, B., & Carabregu-Vokshic, M. (2020). Digitalization of the economy and entrepreneurship intention. Technological Forecasting and Social Change, 164(5), 1-14. https://doi.org/10.1016/j.techfore.2020.120043
Bjorkroth, T. (2003). Engine or wheels of our prosperity? Infrastructure and economic growth and effects of liberalisation of the Finnish telecommunications market, (PhD thesis) Abo Akademi Department of Economics and Statistics.
Brynjolfsson, E., & Collis, A. (2019). How should we measure the digital economy? Harvard Business Review, 97, 140-146.
Bukht, R., & Heeks, R. (2017). Defining, Conceptualizing and Measuring the Digital Economy.http://www.informatics.manchester.ac.uk/news/latest-stories-updates/defining-conceptualising-and-measuring-the-digital-economy/
Canning, D. (1999). Telecommunications and aggregate output. CAER II discussion papers 56. Harvard Institute for International Development.
Castells, M., & Cardoso, G. (2006). The network society. Washington, D.C: Center for Transatlantic Relations, Paul H. Nitze School of Advanced International Studies, Johns Hopkins University.
Curran, D. (2018). Risk, innovation, and democracy in the digital economy. European Journal of Sociology Theory, 21(2), 207-226. https://doi.org/10.1177/1368431017710907
Dewan, S., & Kraemer, K. (2000). Information technology and productivity: Evidence from country-level data. Management Science, 46, 548–562.
Fernández-Portillo, A., Almodóvar-González, M., Coca-Pérez, J. L., & Jiménez-Naranjo, H. V. (2019). Is sustainable economic development possible thanks to the deployment of ICT? Sustainability, 11(22), 6307. https://doi.org/10.3390/su11226307
Ghosh, S. (2016). Does mobile telephony spur growth? Evidence from Indian states, Telecommunication Policy, 40, 1020–1031.
Gomber, P., Kauffman, R. J., Parker, C., & Weber, B. W. (2018). On the fintech revolution: Interpreting the forces of innovation, disruption and transformation in financial services. Journal of Management Information Systems, 35(1), 220-265. https://doi.org/10.1080/07421222.2018.1440766
Habibi, F., & Zabardast, M. A. (2020). Digitalization, education and economic growth: A comparative analysis of Middle East and OECD countries, Technology in Society, 63, 1-9. https://doi.org/10.1016/j.techsoc.2020.101370
Hansen, B. (1995). Rethinking the univariate approach to unit root testing: Using covariates to increase power. Econometric Theory, 11, 1148-1171.
Hofman, A., Aravena, C., & Aliaga, V. (2016). Information and communication technologies and their impact in the economic growth of Latin America, 1990–2013.Telecommunications Policy, 40(5), 485–501.
Im, K. S., Pesaran, M. H., & Shin, Y. (2003). Testing for unit roots in heterogeneous panels. Journal of Econometrics, 115, 53-74.
Levin, A., Lin, C. F., & Chu., C. S .J. (2002). Unit Root Test in Panel Data: Asymptotic and Finite Sample Properties. Journal of Econometrics, 108, 1-24.
Madden, G. (1998). CEE telecommunications investment and economic growth. Information Economics and Policy, 10, 173-195. Available at https://mpra.ub.uni-muenchen.de/11843/1/MPRA_paper_11843.pdf
Manyika, J., & Roxburgh, C. (2011). The great Transformer: The impact of internet on Economic growth and Prosperity. Mckisey Global institute.
Myovella, G., Karacuka, M., & Haucap, J. (2019). Digitalization and economic growth: a comparative analysis of Sub-Saharan Africa and OECD economies. Telecommunication Policy, 44(2), 101-110. https://doi.org/10.1016/j.telpol.2019.101856
Niebel, T. (2014). ICT and economic growth comparing developing, emerging and developed countries, SSRN Electronic Journal, 104, 1-10.
Pedroni, P. (1995). Panel cointegration, asymptotic and finite sample properties of pooled time series tests with an application to the PPP hypothesis, Working Paper in Economics, 92-013, Indiana University.
Pedroni, P. (1997). Panel cointegration, asymptotic and finite sample properties of pooled time series tests with an application to the PPP hypothesis: New results, Working Paper in Economics, Indiana University.
Pradhan, R. P., Arvin, M. B., & Norman, N. R. (2015). Dynamics of information and communications technologies infrastructure, economic growth, and financial development: Evidence from Asian countries, Technology in Society, 42, 135–149. https://doi.org/10.1016/j.techsoc.2015.04.002
Pradhan, R. P., Mallik, G., & Bagchi, T. P. (2018). Information communication technology (ICT) infrastructure and economic growth: A causality evinced by cross-country panel data, IIMB Management Review, 30(1), 91–103. https://doi.org/10.1016/j.iimb.2018.01.001
Qiang, C. Z.-W., & Rossotto, C. M. (2009). Economic impacts of broadband. In Information and Communications for Development, Extending Reach and Increasing Impact, World Bank, Washington D.C, pp. 35–50. Available at https://documents1.worldbank.org/curated/en/645821468337815208/pdf/487910PUB0EPI1101Official0Use0Only1.pdf
Roller, L., & Waverman, L. (2001). Telecommunications infrastructure and economic development: A simultaneous approach. American Economic Review, 91, 909–923.
Samimi, J. A., Ledary, R. B., & Samimi, J. F. (2015). ICT & economic growth: A comparison between developed & developing countries. International Journal of Liability and Scientific Enquiry, 1, 26–32.
Sassi, S., & Mohamed, G. (2013). Financial development, ICT diffusion and economic growth: lessons from MENA region, Telecommunications Policy, 37, 252–261.
Solomon, E.M., & van Klyton, A. (2020). The impact of digital technology usage on economic growth in Africa, Utilities Policy, 67, 1-19. https://doi.org/10.1016/j.jup.2020.101104
Thompson, H., & Garbacz, C. (2011). Economic impacts of mobile versus fixed broadband. Telecommunications Policy, 35, 999–1009.
Vasylieva, T., Lyulyov, O., Bilan, Y. & Streimikiene, D. (2019). Sustainable Economic Development and Greenhouse Gas Emissions: The Dynamic Impact of Renewable Energy Consumption, GDP, and Corruption. Energies, 12, 3289.
Ward, M. R., & Zheng, S. (2016). Mobile telecommunications service and economic growth: Evidence from China. Telecommunications Policy, 40, 89–101.
Yousefi, A. (2011). The impact of Information and Communication Technology on Economic Growth: Evidence from Developed and Developing Countries. Economics of Innovation and New Technology, 20(6), 581-596. https://doi.org/ 10.1080/10438599.2010.544470
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Published
Jun 29, 2021
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How to Cite
Mgadmi, N. ., Moussa, W., Béjaoui , A. ., Sadraoui , T. ., & Guachaoui, . A. (2021). Revisiting the Nexus between Digital Economy and Economic Prosperity: Evidence from a Comparative Analysis. Journal of Telecommunications and the Digital Economy, 9(2), 69–90. https://doi.org/10.18080/jtde.v9n2.384
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Digital Economy & Society
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