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How Does Information and Communication Technologies Affect Economic Growth? A Comparative Analysis of the Economies of the European Union and Asia-Pacific Region

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  • Tamerlan Mashadihasanlı

    (Istanbul University, Institute of Social Sciences/Department of Economics (English), Istanbul, Turkiye)

  • Haluk Zülfikar

    (Istanbul University, Institute of Social Sciences/Faculty of Economics, Department of Economics, Istanbul, Turkiye)

Abstract

In the contemporary era of digitization, economies have been significantly influenced by the emergence of information and communication technology (ICT). In this digital age, the ICT sector all over the world has entered a period of rapid growth. The swift advancements within the ICT sector have played a pivotal role in shaping the global economy while simultaneously influencing the economic landscape of the European Union (EU) and Asia-Pacific region (APAC) countries. The purpose of this study is to comparatively evaluate ICT, its place in the EU and APAC countries’ economies, and how it affected economic growth between 2007-2019. The dataset was analyzed using the Levin, Lin, and Chu unit root test, pooled ordinary least-squares (OLS), fixed effects, random effects, and two-step system generalized method of moments (GMM) estimators. The two-step system GMM findings show ICT’s effects on economic growth to vary according to regional conditions. While Internet use has been found to contribute positively to the economic growth of the countries within the EU, this situation was observed to have had the opposite effect in the APAC region countries. These region-specific dynamics highlight the need for tailored policy considerations, suggesting the impact of ICT on economic development to be contingent upon regional conditions. The novelty of this research lies in its cross-regional perspective, thus contributing valuable knowledge for informed policy decisions in the increasingly interconnected global landscape. This study emphasizes the importance of regional dynamics in understanding the influence ICT has on economic growth and can guide policy makers and business leaders in shaping ICT strategies and investments according to regional characteristics.

Suggested Citation

  • Tamerlan Mashadihasanlı & Haluk Zülfikar, 2024. "How Does Information and Communication Technologies Affect Economic Growth? A Comparative Analysis of the Economies of the European Union and Asia-Pacific Region," Journal of Economic Policy Researches, Istanbul University, Faculty of Economics, vol. 11(1), pages 99-114, January.
    • Handle: RePEc:ist:iujepr:v:11:y:2024:i:1:p:99-114
    DOI: 10.26650/JEPR1392777
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    References listed on IDEAS

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    More about this item

    Keywords

    ICT; economic growth; GMM; European Union countries; Asia-Pacific region countries JEL Classification : O11 ; O20 ; O33;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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