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What Causes What? Panel Cointegration Approach on Investment in Telecommunication and Economic Growth: Case of Asian Countries

Author

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  • Bilal Mehmood

    (Government College University, Lahore, Pakistan)

  • Wasif Siddiqui

    (Government College University, Lahore, Pakistan)

Abstract

This study empirically examines long run relationship between investment in telecommunication and economic growth in selected Asian countries. We resort to econometric tests such as panel unit root tests and panel cointegration test purposed by Pedroni (1997, 1999) for annual data from 1990-2010 of 23 Asian countries. The empirical results suggest that there exists causality between economic growth and investment in telecommunication. Causality runs from investment in telecom to economic growth and not otherwise. Since telecommunication sector has an innate ability to contribute to economic growth in a dual fashion. Firstly, as a part of services sector and secondly as an expediter to other sectors of the economy. Policy recommendations are made on the basis of favorable findings in support of ICT-led growth.

Suggested Citation

  • Bilal Mehmood & Wasif Siddiqui, 2013. "What Causes What? Panel Cointegration Approach on Investment in Telecommunication and Economic Growth: Case of Asian Countries," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 16(47), pages 3-16, March.
    • Handle: RePEc:rej:journl:v:16:y:2013:i:47:p:3-16
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    References listed on IDEAS

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    Cited by:

    1. Bilal Mehmood & Syed Hassan Raza & Mahwish Rana & Huma Sohaib & Muhammad Azhar Khan, 2014. "Triangular Relationship between Energy Consumption, Price Index and National Income in Asian Countries: A Pooled Mean Group Approach in Presence of Structural Breaks," International Journal of Energy Economics and Policy, Econjournals, vol. 4(4), pages 610-620.
    2. Hussain, Ammar & Batool, Irem & Akbar, Minhas & Nazir, Marina, 2021. "Is ICT an enduring driver of economic growth? Evidence from South Asian economies," Telecommunications Policy, Elsevier, vol. 45(8).
    3. Rudra P. Pradhan & Mak B. Arvin & Mahendhiran Nair & Sara E. Bennett & John H. Hall, 2019. "The information revolution, innovation diffusion and economic growth: an examination of causal links in European countries," Quality & Quantity: International Journal of Methodology, Springer, vol. 53(3), pages 1529-1563, May.
    4. Farwa Amjad & Bilal Mehmood, 2016. "Dynamics of FDI, Technological Transformation and Environmental Degradation in Developing Countries: A Panel Analysis," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 18(59), pages 3-24, March.
    5. Pradhan, Rudra P. & Arvin, Mak B. & Norman, Neville R. & Bele, Samadhan K., 2014. "Economic growth and the development of telecommunications infrastructure in the G-20 countries: A panel-VAR approach," Telecommunications Policy, Elsevier, vol. 38(7), pages 634-649.
    6. Ajoy Ketan Sarangi & Rudra Prakash Pradhan, 2020. "ICT infrastructure and economic growth: a critical assessment and some policy implications," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 47(4), pages 363-383, December.
    7. Pradhan, Rudra P. & Arvin, Mak B. & Nair, Mahendhiran & Bennett, Sara E. & Bahmani, Sahar, 2019. "Short-term and long-term dynamics of venture capital and economic growth in a digital economy: A study of European countries," Technology in Society, Elsevier, vol. 57(C), pages 125-134.
    8. Bakari, Sayef, 2022. "The Impact of Digitalization and Patent on Economic Growth in Romania," MPRA Paper 114259, University Library of Munich, Germany.
    9. Pradhan, Rudra P. & Arvin, Mak B. & Nair, Mahendhiran S. & Hall, John H. & Bennett, Sara E., 2021. "Sustainable economic development in India: The dynamics between financial inclusion, ICT development, and economic growth," Technological Forecasting and Social Change, Elsevier, vol. 169(C).
    10. Rudra P. Pradhan & Sahar Bahmani & Rebecca Abraham & John H. Hall, 2023. "Insurance Market and Economic Growth in an Information-Driven Economy: Evidence from a Panel of High- and Middle-Income Countries?," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 30(3), pages 587-620, September.
    11. Bilal Mehmood & Parvez Azim & Syed Hassan Raza, 2015. "Reconsidering the Finance-Growth Nexus in Asian Countries: A Panel ARDL Approach," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 3(1), pages 1-5, January.
    12. Rudra P. Pradhan, Mak B. Arvin, & Mahendhiran Nair, Jay Mittal, & Neville R. Norman, 2017. "Telecommunications infrastructure and usage and the FDI–growth nexus: evidence from Asian-21 countries "Abstract: This paper examines causal relationships between telecommunications infrastructur," Department of Economics - Working Papers Series 2032, The University of Melbourne.
    13. Bilal Mehmood & Anam Shafique & Rabia Rafaqat, 2014. "Is Solow’s Paradox Absent in World Leading Capital Markets? Econometric Evidence," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 17(52), pages 45-62, June.
    14. Haftu, Girmay Giday, 2019. "Information communications technology and economic growth in Sub-Saharan Africa: A panel data approach," Telecommunications Policy, Elsevier, vol. 43(1), pages 88-99.
    15. Bessan Ayédoun, Eudoxie & Ayédoun, Christian, 2020. "Développement des Infrastructures de Télécommunication et Croissance Economique dans les Pays de l’UEMOA: une Analyse de la Causalité sur Données de Panel à partir d’un VECM [Telecommunication Infr," MPRA Paper 104459, University Library of Munich, Germany, revised 01 Feb 2021.
    16. Jakub Čihák, 2019. "Vliv mobilní telefonie na ekonomický růst [Impact of Mobile Communications on Economic Growth]," Politická ekonomie, Prague University of Economics and Business, vol. 2019(3), pages 291-315.
    17. Kallal, Rahim & Haddaji, Abir & Ftiti, Zied, 2021. "ICT diffusion and economic growth: Evidence from the sectorial analysis of a periphery country," Technological Forecasting and Social Change, Elsevier, vol. 162(C).
    18. Dehghan Shabani, Zahra & Shahnazi, Rouhollah, 2019. "Energy consumption, carbon dioxide emissions, information and communications technology, and gross domestic product in Iranian economic sectors: A panel causality analysis," Energy, Elsevier, vol. 169(C), pages 1064-1078.
    19. Pradhan, Rudra P. & Arvin, Mak B. & Hall, John H., 2016. "Economic growth, development of telecommunications infrastructure, and financial development in Asia, 1991–2012," The Quarterly Review of Economics and Finance, Elsevier, vol. 59(C), pages 25-38.
    20. Pradhan, Rudra P. & Arvin, Mak B. & Norman, Neville R., 2015. "The dynamics of information and communications technologies infrastructure, economic growth, and financial development: Evidence from Asian countries," Technology in Society, Elsevier, vol. 42(C), pages 135-149.
    21. Bilal Mehmood & Haider Mahmood, 2014. "Broadband-Growth Relationship in Asian Perspective: A Revisit Using System Generalized Method of Moments (GMM) and Panel Fully Modified Ordinary Least Squares (Pfmols)," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 2(6), pages 229-237, June.

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    More about this item

    Keywords

    Telecommunication; Economic Growth; Panel Cointegration; Unit Root Tests; Network; Spillover.;
    All these keywords.

    JEL classification:

    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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