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Impact of ICT diffusion on the interaction of growth and its volatility: Evidence from cross-country analysis

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  • Thanh Phuc Nguyen
  • Thi Thu Hong Dinh
  • Tho Tran Ngoc
  • Trang Duong Thi Thuy

Abstract

There is a large body of research investigating the impact of information and communication technologies (ICT) on economic growth; however, the empirical evidence on growth and its volatility simultaneously driven by ICT diffusion has still remained scarce so far. To fill this void, system two-step generalized method of moments (S-GMM) estimator and a new proxy capturing the product of growth and its fluctuation is employed to determine the nexus between ICT penetration and the interaction of growth and its volatility. Using a comprehensive panel of 122 economies covering the period 2000–2019, we find that all proxies for the ICT revolution show positive impacts on the product of growth and its volatility. This means that an increase in ICT diffusion could lead to both higher growth and lower growth volatility. To offer robust and consistent results, ICT growth and its volatility nexus are confirmed through several econometric techniques such as panel quantile regression, the control of fixed effects, alternative measure for the interaction between growth and its fluctuation, and across countries with different national incomes. The research could give rise to use of this proxy for the product of growth and its volatility with inverse hyperbolic sine transformation in the empirically econometric model for the future studies.

Suggested Citation

  • Thanh Phuc Nguyen & Thi Thu Hong Dinh & Tho Tran Ngoc & Trang Duong Thi Thuy, 2022. "Impact of ICT diffusion on the interaction of growth and its volatility: Evidence from cross-country analysis," Cogent Business & Management, Taylor & Francis Journals, vol. 9(1), pages 2054530-205, December.
    • Handle: RePEc:taf:oabmxx:v:9:y:2022:i:1:p:2054530
    DOI: 10.1080/23311975.2022.2054530
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    Cited by:

    1. Lee, Chien-Chiang & Yahya, Farzan, 2024. "Mitigating energy instability: The influence of trilemma choices, financial development, and technology advancements," Energy Economics, Elsevier, vol. 133(C).
    2. Agus Salim & Jun Wen & Anas Usman Bello & Firsty Ramadhona Amalia Lubis & Rifki Khoirudin & Uswatun Khasanah & Lestari Sukarniati & Muhammad Safar Nasir, 2024. "Does information and communication technology improve labor productivity? Recent evidence from the Southeast Asian emerging economies," Growth and Change, Wiley Blackwell, vol. 55(1), March.
    3. Mwananziche, Josephat & Myovella, Godwin & Karacuka, Mehmet & Haucap, Justus & Moshi, Goodiel, 2023. "Is digitalization a booster for economic growth in Africa? Short run and long run evidence from Tanzania," Telecommunications Policy, Elsevier, vol. 47(10).
    4. Yilmaz Bayar & Rita Remeikienė & Gamze Sart, 2024. "ICT Penetration and Human Development: Empirical Evidence from the EU Transition Economies," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 2422-2438, March.

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