Information and Communications Technology and Economic Growth

Nicole Melnyk, Dr. Jason Dunick, Department of Economics, George Mason University, 4400 University Dr, Fairfax, VA 22030

Since the late 1990s, broadband infrastructure has developed worldwide, allowing for the easier generation and distribution of decentralized information. Endogenous growth theory considers information dissemination to be a key driver of economic growth. My research project replicates a 2011 study that estimates the effect of fixed broadband infrastructure on economic growth from 1996 to 2007 for a panel of OECD countries. The authors found that the introduction and diffusion of broadband significantly impacted GDP growth. However, one of the study’s limitations is that it focuses only on a short period of time (1996-2007); the authors could not accurately predict the future role of broadband since they could not know its impact on further technological innovation.

My research project fills this gap by including an extra decade of time-series data for a larger pool of countries. Moreover, it widens the focus of the original study from fixed broadband infrastructure to incorporate the major technological innovations of the past decade (namely, mobile telephony and computers). I am examining additional measures of information and communications technology (ICT) to estimate the effects of newer infrastructures on economic growth. My project consists of a review of the relevant literature, a simple growth regression framework, and an IV approach to test for instrument validity and robustness and to present results on the causal effect of ICT penetration on economic growth. With the introduction and diffusion of contemporaneous ICT throughout the past decade, I expect fixed broadband to experience less demand and have a smaller impact on economic growth. If these results are correct, my project presents an interesting case of “creative destruction”— the notion that innovation fosters economic dynamism, as it leads to the replacement of outdated production units with newer, more efficient ones.  

Additional Abstract Information

Presenter: Nicole Melnyk

Institution: George Mason University

Type: Poster

Subject: Economics

Status: Approved

Time and Location

Session: Poster 5
Date/Time: Tue 12:30pm-1:30pm
Session Number: 4145