ICT and global economic growth: Contribution, impact, and policy implications

My thesis measures and assesses the impact of Information and Communication Technologies (ICT) on global economic growth by examining the sources of economic growth in the 50 major ICT-spending economies, which altogether account for nearly 98 percent of the global ICT market. The thesis concentrates on three interrelated topics: (i) the contribution of ICT to output and labor productivity growth in the individual countries under investigation; (ii) the global picture of ICT contribution to growth and its key determinants; and (iii) the impact of ICT on economic growth.; My study finds that ICT contribution is significant not only in developed countries but also in many developing ones. Furthermore, the contribution of ICT to growth in most economies has drastically increased over time. However, the variance of ICT contribution to growth across countries has widened considerably and the global ranking of countries by ICT contribution to growth has both dynamic and static features: some countries stay at the top or bottom consistently while many others move up or down dramatically; there is a clear convergence among developed countries and a trend of divergence among developing economies in ICT contribution to growth. The key determinants of ICT contribution to growth include income level, education, institutional quality, openness, and English fluency; furthermore, the impact of institutional quality, integration, and English fluency significantly accelerates over time.; My study also finds that ICT has a causal effect on economic growth with its share in output growth was in the range of 5--15 percent for period 1995--2000. Moreover, ICT contribution also enhances the quality of growth; that is, countries with a higher level of ICT capital accumulation per capita tend to achieve a higher growth rate for given levels of growth in labor and capital inputs; this evidence is strongest for the G7 group. In addition, my study finds some limited evidence of spillover effects of ICT: the correlation between ICT capital accumulation per capita and TFP growth is significant for the G7 group but not significant for the rest of the sample.; Finally, my thesis presents an ICT agenda framework for governments to wisely embrace the ICT revolution to promote economic growth and development.