The Effects of Information and Communication Technology (ICT) on the Total Factor Productivity (TFP) in Selected Developing Countries

Analysis of ICT impacts on the economic performance has been started since 1990s. Researches have found that ICT have remarkable effect on TFP in both developed and some of developing countries. The aim of this paper is to investigate the impacts of ICT on the TFP in 37 developing countries using Panel Data method in the period of 1995-2003. This paper uses three types of variables for ICT; fixed line phone penetration, network index and ICT capital stock (ICT infrastructure), internet penetration and ICT-use index (ICT usage), and ICT expenditure (spillover effect) to estimate the benefits of ICT.
Findings indicate fixed line phone and internet penetration, network index, ICT-use index, ICT capital stock over total capital stock, human capital; saving rate and trade openness have positive effect on the TFP in developing countries. The elasticity of TFP relative to infrastructure and usage is 0.065 and 0.025 respectively. In other words, one percent improvement in infrastructure, usage and ICT expenditure can increase TFP more than 0.09 percent