UNIVERSITY OF ORLEANS

DEPARTMENT OF ECONOMICS

COURSE:

ADVANCED MACROECONOMICS

A PROJET TOPIC

ON

Impact of ICT on Economic Growth in OECD Countries

BY

Bernadin ADOUWEKONOU

SUPERVISOR

PROFESSOR: Camelia TURCU

JANUARY 2023

Page 1 of 23
SUMMARY:

I- INTRODUCTION……………………………………………………………………4

II- LITERATURE REVIEW…………………………………………………………….5

III- DATA………………………………………………………………………………...9

IV- METHODOLOGIE…………………………………………………………………..9

V- RESULTS…………………………………………………………………………….11
A-Descriptive Statistics………………………………………………………………11
B-Econometric Modelling……………………………………………………………15

VI- CONCLUSION………………………………………………………………………18

VII- REFERENCES……………………………………………………………………….19

VIII- APPENDIX…………………………………………………………………………...20

Page 2 of 23
ABSTRACT

Investment in information and communication impacts on economic growth in a variety of

ways, either through the export or import of technology or through human capital, i.e. education
and health.
This paper uses data from secondary sources from the World Bank and also data from the
OECD to examine 17 OECD countries over a 24-year period to show the positive and negative
impacts of ICT, Human Capital, FDI,.. etc., on economic growth. Basically, we will first
conduct a descriptive analysis and then conduct a panel regression to better identify the fixed
or random effect of our model.

Keyword: ICT (Investment in Information and Communication), OECD (Organization for

Economic Co-operation and Development)

Page 3 of 23
I-INTRODUCTION:
Investment in technology contributes to overall capital deepening. The greater use of
technology may help firms reduce their costs, enhance their productivity and increase their
overall efficiency, and thus raise economic growth. Moreover, greater use of information and
communication technology may contribute to network effects, such as lower transaction costs,
higher productivity of knowledge workers, and more rapid innovation, which will improve the
overall efficiency of the economy (Moradi and Kebryaee, 2005).
In the economic jargon, in addition to globalization, all activities related to new information
and communication technologies, such as telemarketing, tele-secretarial and Internet sales, refer
to the expression "new economy", meaning new actors (start-ups) and economic models born
in a context of globalization of trade and opening of markets. And thus, contributing to an
increase of the growth, by the "creation of new commercial web companies, by a strong
competition allowed by the world of the web and by a management of the stock facilitated
thanks to the electronic trade".
Information and communication technologies affect different areas such as education, health
and especially the economy in its different sectors (raw materials, industrial or services).
Policies of the OECD (2000) apprehended the field of the NTIC as that of "the whole of the
sectors of economic activities which contribute to the visualization, to the treatment, to the
storage and to the transmission of the information by electronic means" (Didier Lombard,
Patrice Roussel and Sylvie Du martin, 2001).
Technological development is an important factor increasing the growth rate of economy at
macro level and profits and market shares of the firms at micro level. The social development
occurs if a society can make technological advances and reflect them to their social and cultural
lives. It seems that economy has been guiding the technology as the innovations introduced to
the world by technological advances are closely correlated with economy and follow the
economic relationships. The nations that could efficiently disseminate technology and
information to all areas of the society can create new areas of employment in their countries.
However, these new areas require qualified work force. Thus, necessary revisions should be
made to the education policies to ensure the development of human sources with such
qualifications supporting the economic growth (Elster, 1983).
The purpose of this paper is to examine the relationship between ICT investment and economic
growth in OECD member countries using a generalized method of moments (GMM) within a
dynamic panel data method over the period 1997-2019. The main hypothesis of the paper is
that the effect of ICT (high technology) on economic growth is positive and significant.

Page 4 of 23
II- LITERATURE REVIEW
Numerous studies support a causal relationship between ICT and economic growth (see Arvin
et al., 2021; Dutta, 2001; Pradhan, Pradhan et al., 2015b; Shiu & Lam, 2008). Nevertheless, the
causality results diverge again, another strategic element of economic growth is ICT. The
impact of ICT on economic growth works in several ways, including that increasing demand
for ICT goods and services creates the required ICT. Transaction costs decrease where ICT is
better, enabling productivity and efficiency, lowering the quality of decision-making, and
causing and reducing various externalities (see Appiah-Otoo & Song, 2021; Nair et al., 2020;
Pradhan et al ., 2014; Solomon & van Klyton, 2020; Vu et al., 2020; Vu, 2011). Several studies
support a causal relationship between ICT and economic growth, the rapid advances in ICT
worldwide over the past three years have attracted the attention of many economists and
researchers who have focused on studying the impact of ICT diffusion on economic growth in
both developed and developing countries.
Leading contemporary theories such as neo-Schumpeterian theories (Schumpeter 1934; Pyka
and Andersen 2012) and neoclassical growth theory have demonstrated the existence of a
significant relationship between ICT and economic growth. These theories argue that ICT
enters the economic supply as an input in the form of capital and leads to the improvement of
the production process through deepening of capital and advances in technology and labour
quality. artwork. Does ICT add value at enterprise, sectoral and productive levels, thereby
improving productivity and economic growth at country level (Quah 2002, and Rezagholizadeh
2017). Nibel (2018) Examine the relationship between ICT and economic cross-border trade in
a sample of 59 countries over the period 1995-2010 using panel regression estimators. The
results of the study showed that the general development of ICT is an important indicator of
economic growth. The study also highlights that the significant effect of ICT is robust in
countries with different levels of economic development. The author highlights the need for
new investments in ICT stables to maintain the GDP growth rate. Stanley et al. (2018) Use the
meta-regression method to examine the impact of ICT on economic growth based on a sample
of 59 published articles. Contrary to Nibel (2018), the study shows that different ICT proxies
have different effects on GDP. In addition, these effects also depend on the state of economic
development. The study shows that the impact of mobile phone penetration has a much larger
economic impact on GDP growth.
In the academic literature there is a growing body of research optimized for analyzing the
relationship between the ICT sector, ICT infrastructure development and investment in ICT and
national or regional economic growth. Based on previous empirical studies, many researchers
have identified the development of ICT as one of the main drivers of economic growth. Despite
this, some researchers (Hodrob et al., 2016; Toader et al., 2018; Myovella et al., 2020 etc.) note
that economic growth largely depends on the level of national economic development and the
ICT skills of the population, implying that ICT development can bring economies greater
economic benefits than developing or transition economies. While theoretical work has shown
a positive effect of ICT on economic growth, several empirical studies on this relationship have
produced mixed results. On the one hand, numerous studies have confirmed the existence of a
clearly positive impact of the diffusion of ICT on economic growth. Early cross-country studies
focused on the impact of telecommunications technologies such as landlines on economic
growth in developed countries. Hardy (1980) using data from 60 countries over the period 1968-
1976; Roller and Waverman (2001), using data from 21 Organization for Economic Co-

Page 5 of 23
operation and Development (OECD) countries over a 20-year period (1970-1990); and Madden
and Savage (1998), who, among other things, examined a sample of 27 Central and Eastern
European countries over the period 1990-1995, showed a strong positive relationship between
investment in telecommunications infrastructure and economic growth. Some recent studies
have confirmed the strong contribution of new telecommunication technologies such as mobile
phones, personal computers, and the Internet to the economic growth of many countries in the
world, especially the troubled ones. (Inklaar et al. 2005; Koutroumpis 2009; Gruber and
Koutroumpis 2010; Vu 2011).
In the economic literature, five (5) complementary transmission channels of ICT on growth
have been identified: the multiplier effect due to ICT investment, the "deflator" effect on
inflation following the fall in prices in the ICT sector and their repercussion in the other sectors,
the "capital deepening" effect translating an improvement in the return on labor following
capital/labor substitution, the "quality" effect translating the improvement in the characteristics
of ICT and, by ricochet effect, the improvement in the quality of many goods and services and
finally, the "overall factor productivity" effect: an acceleration of productivity as a result of ICT
investment.
A- Multiplier effects
The outputs of the ICT sector are acquired by businesses as capital goods and/or intermediate
consumption goods, but also as final consumption goods. The strong growth of business and
consumer equipment in ICT goods has resulted in an increase in overall economic growth. The
main mechanism underlying the argument is a Keynesian investment multiplier for ICT that is
larger than the investment multiplier for non-ICT equipment. Given their generic nature
(Helpman, 1998), ICTs seem to have larger economic effects on the rest of the economy.
Pohjola (2002) defines a critical threshold for the ICT sector at which dynamic and significant
effects on the rest of the economy are observed. For example, in the United States the ICT
sector exceeds 8% of GDP, whereas in France it is around 5%. It could be around 6.5% of
Moroccan GDP for the year 2006.

B- The deflator effect

The second effect concerns the impact of falling ICT prices in general, and computer prices in
particular, on the rest of the economy. Indeed, the continuous fall in prices in the ICT sector,
and in particular that linked to the fall in the price of microprocessors, has led companies to
considerably increase their investment in this area. Behind the acceleration of the pace of
productivity and growth in the US is an acceleration in the pace of decline in the price of
computers and peripheral equipment. This substantial fall in IT prices is leading firms to over-
invest in ICT.
Productivity gains in the ICT sector act as a technology deflator for the rest of the economy,
keeping inflation in check and/or increasing real incomes and growth. For example, since the
computer sector accounts for 1.4% of US GDP and its prices fell by 29% over the period 1996-
1998, a simple rule-of-three calculation gives a deflator effect of 0.37%. Gordon estimates that
the contribution of computers to growth is essentially due to the control of inflation and that it
would be of the order of 0.5% per annum on average for the US economy. In a recent study,

Page 6 of 23
Collecchia and Schreyer (2001) generalized the approach to calculate the ICT technology
deflator for nine OECD countries.

C- The substitution effect of capital for labor

This effect refers to the relative increase in the share of capital compared to labor in the use of
inputs, where ICTs are seen as biased technologies. They lead to the favoring of capital over
labor and skilled over unskilled labor (David, 2001; Jorgenson, 2001; Quah, 2001). In other
words, the growth process favors the accumulation of capital, which is reflected in a decrease
in the relative employment rate of the labor factor and an increase in the relative share of the
capital factor. Capital intensity (the share per employee of capital units) and productivity
increase. For example, Gordon (2002) estimates that two thirds of the acceleration in US
productivity over the period 1996-2001 is due to the substitution effect. However, it should be
noted that ICT capital is a rapidly obsolescing capital, unlike other forms of capital. This
property therefore requires rapid depreciation and demands greater profitability from
companies.

D- The quality effect:

Information technologies can be associated with increases in the intangible components of
outputs such as their variety, consumer convenience and associated services. The apparent
effect concerns the enrichment of the information content of goods and services incorporating
ICT. They would increase quality and promote product differentiation. These benefits would
improve the utility effect for consumers without changing either the price or the quantity of
products incorporating ICT. The utility effect is difficult to take into account, but conditions
the results of the work on this issue. Recent methodological efforts by the OECD have been
undertaken to improve the way in which these qualitative effects are taken into account, but
they are still difficult to identify.
The increase in the growth rate due to ICT-induced product quality effects is thought to come
from a number of sources. Four of them are worth mentioning: innovations relating to variety
effects, the customization of goods (versioning), significant improvements in the principles of
product quality and the positive externalities generated by ICT.

E- The total factor productivity effect

Of a generic nature, the externalities linked to Information and Communication Technologies
(ICT) have spread widely throughout the economy. This wide diffusion would increase
productive efficiency and the pace of technical progress. This translates into an increase in the
Solow residual (the share of growth not explained by the factors of production separately). This
observation reflects a better complementarity between labor and capital factors. For some
economists, such as Askenazy and Gianella (2000) and Greenan et al (2002), this
complementarity is achieved through the use of organizational innovations. ICTs would make
it possible to increase diffuse technical progress. Moreover, unlike the industrialized countries,

Page 7 of 23
developing countries benefit from a positive structural effect. Indeed, the adoption of ICTs by
developing countries coincides with the transformation of their economies from a natural
resource and agricultural base to a more industrial base. This could enhance productivity gains.
The five main channels just mentioned favor the transmission of ICT performance at the
macroeconomic level. The manifestation of these effects depends on the country's position
(producer vs. importer of ICT) (Dirk and Lee, 2001), its size (large vs. small country), its
international specialization, its initial factor endowments (Antonelli, 2003) and the presence or
absence of complementary assets (organizational innovations, institutions, human capital,
incentives, etc.).
The productivity paradox - has it been solved?
The Solow paradox, attributed to the economist Robert Solow who once observed that
computers were everywhere except in the productivity data, held true for much of the 1980s
and early 1990s, during which the rapid diffusion of computers appears to have had little impact
on productivity growth (Solow, 1987).
Many studies in the 1970s and 1980s showed that investment in ICT had little or no impact on
productivity. Many of these studies focused on labor productivity, which made these findings
surprising since investment in ICT increases the stock of productive capital and should
therefore, in principle, contribute to labor productivity growth. Subsequent studies did find
some evidence of a positive impact of ICT on labor productivity. Some studies have also shown
that ICT capital has a stronger impact on labor productivity than other forms of capital,
suggesting that there may be spillover effects from ICT investment. Studies over the past decade
have identified several factors that have contributed to the productivity paradox. First, some of
the spillovers of ICT have not been captured in productivity statistics (Triplett, 1999).
This problem is most prevalent in the services sector, where most ICT investment is made. For
example, the fact that automated teller machines (ATMs) improve the convenience of financial
services is only counted as a qualitative improvement in financial services in some OECD
countries. Similar issues arise for other activities such as insurance, business services and health
services. ICT has accentuated the problems of measuring productivity, as it allows for more
customization, differentiation and innovation in the services provided, which is often difficult
to capture in statistical surveys. Measurement has improved in some sectors and in some
member countries, but this remains an important issue for examining the impact of ICT on
performance. A second reason is that the spillover effects of ICT use may have taken
considerable time to emerge, as has been the case with other key technologies, such as
electricity. The diffusion of new technologies is often slow and it can take a long time for firms
to adapt to them, for example to change their organization, improve their workforce or invent
and implement efficient processes. Moreover, assuming that ICTs contribute to MFP
improvements in part through the networks they enable, it takes time to build networks that are
sufficiently developed to have an effect on the economy. ICT spread very rapidly in many
OECD countries during the 1990s and many recent econometric studies show a stronger impact
of ICT on economic performance than was the case in studies using data from the 1970s or
1980s. A third reason is that many earlier studies that sought to trace the impact of ICT at the
firm level relied on relatively small samples of firms from private sources. If the initial impact
of ICT on performance was small, these studies could show little evidence, as this could easily
be buried in the econometric 'noise'. These samples may also not have been representative of

Page 8 of 23
the total population. In addition, several studies have suggested that the impact of ICT on
economic performance may vary by activity, and it is therefore important that the analysis
distinguishes between sectors. More recent studies using larger samples of 'official' data and
covering several industries are therefore more likely than earlier studies to show an impact of
ICT. Moreover, early studies used very disparate data sets on ICT and its diffusion, often of
uncertain quality. Considerable progress has been made in recent years in the measurement of
ICT investment and diffusion, implying that the range of available data is larger, more robust
and statistically more meaningful than before.

III-Data:
We will use World Development Index data for a period from 1997 to 2020 from 17 countries
of OECD (Australia, Portugal, France, Ireland, Spain, Italy, Greece, Japan, Germany, Belgium,
Finland, Denmark, Canada, Netherlands, Sweden, United Kingdom, United State).
We use a macro panels here because the series spans over 20 years. However, we will first
proceed to the descriptive analysis and the analysis of the panel data with the Stata software.

IV-Methodology:
To analyze the impact of ICT on Economic Growth in OECD countries, we choose to work
with the production function approach; because it was more widely used in economics and it
had less restrictive assumptions. Specifically, the following simple double log Cobb-Douglass
production function was the equation used in our regression:
𝒍𝒏𝑮𝑫𝑷𝒊𝒕 = 𝜷𝟏 𝒍𝒏𝑰𝑪𝑻𝒊𝒕 + 𝜷𝟐 𝒍𝒏𝑬𝒙𝑻𝒆𝒄𝒉𝒊𝒕 + 𝜷𝟑 𝑷𝒐𝒑𝑰𝒏𝒕𝒆𝒓𝒏𝒆𝒕𝒊𝒕 + 𝜷𝟒 𝒊𝒄𝒕𝒈𝒐𝒐𝒅𝒆𝒙𝒑𝒐𝒓𝒕𝒊𝒕
+ 𝜷𝟓 𝒊𝒄𝒕𝒈𝒐𝒐𝒅𝒊𝒎𝒑𝒐𝒓𝒕𝒊𝒕 + 𝜷𝟔 𝒍𝒏𝑯𝑪𝒊𝒕 + 𝜷𝟕 𝒍𝒏𝑭𝑫𝑰𝒊𝒕 + 𝜺𝒊𝒕

Where: 𝜷𝟎 is a constant coefficient, 𝒍𝒏𝑮𝑫𝑷𝒊𝒕 is natural logarithm of real GDP per capita,
𝒍𝒏𝑰𝑪𝑻𝒊𝒕 is investment in Information and communication technologies (ICT), 𝒍𝒏𝑬𝒙𝑻𝒆𝒄𝒉𝒊𝒕 is
high-technology export, 𝒍𝒏𝑷𝒐𝒑𝑰𝒏𝒕𝒆𝒓𝒏𝒆𝒕𝒊𝒕 is individuals using the internet, 𝒍𝒏𝑯𝑪𝒊𝒕 is log of
secondary and tertiary school enrollment used as measure of investment in human capital,
𝒍𝒏𝑭𝑫𝑰𝒊𝒕 is foreign investment as an indicator of technical and technological improvement,
Ictgood export and Ictgoodimport.

➢ Somes explanation of explanatory variables of model:

a) Investment in Information and Communication (ICT):

Investment is an engine that generates economic growth. In other words, it is a building block
of wealth creation. Investment plays a key role in economic growth, or it is a goal for each
country. During the periods of strong growth, is explained by the effect of investment. The
thirty glorious years, growth is very strong thanks to the high rates of investment. The
investment day on two sides is the effect on the supply and the effect on the demand.

Page 9 of 23
Example of a positive external effect: The state invests in infrastructure, communication, health,
education, human capital and training. The whole economy benefits from this positive external
effect, so supply capacity increases and growth increases. An investment that improves the
supply side or it consists in integrating technical progress in the production process, it causes a
better-quality supply then the increase of growth. Investment acts on demand, as seen through
the multiplier effect that investment has on income. Additional investment leads to more
growth.

In fact, communication will play a major role in presenting the company and optimizing it
through its communication channels (website, print, social networks, etc.). Communication is
much more than simply broadcasting a message. It is a set of tools that will give you the keys,
the elements of language and the right discourse to adopt to reach and convince your target
audience. Communication must be considered as an investment and a performance lever.

b) High-technology export (ExpTech)

We chose this variable because technological progress is a major source of economic growth.
Technological progress increases economic output and welfare by raising productivity, i.e. by
allowing more output with equal resources, and by fostering more innovation and development.
Thus, by improving production techniques, technical progress produces productivity gains
favorable to growth: the factors of production become more efficient and make it possible to
produce more with the same quantity of labor and capital.

c) Individuals using the internet (PopInternet)

In economics, we often talk about so-called "disruptive" innovations, which are supposed to
give a serious boost to the economy. The Internet is a great place to collaborate with other
people around the world. You can use many online services to collaborate with others, and you
can even speed up the production of new products and services through instant messaging. We
believe that the use of the internet could have a significant effect on the growth of the economy.

d) Investment in human capital (HC)

Human capital has an impact on power, on urban growth, on income distribution. Investing in
human capital can protect workers and improve safety an important aspect of quality of life.
Economic growth is conditioned by the development of the social system in general and of
people in particular. Similarly, healthy and well-trained people contribute more effectively to
the production of desired goods and services. Investment in human capital can take the form of
support for health, education and so-called short, but solid and well-targeted training for the
peak needs of business.

e) Foreign direct investment (FDI)

Foreign Direct Investment can bridge the gap between savings and investment, introduce
modern capital goods and the most advanced management practices. In addition, FDI can create

Page 10 of 23
jobs (recruitment in subsidiaries of multinationals), knowledge transfer (increase in knowledge
stock), access to international production and distribution networks. This variable would be the
basis for economic growth.

• We have explained theoretically what the impact of these variables could be on raising the
rate of economic growth, i.e. the effect of each variable on national GDP. In the next
chapter, we will better understand these effects and shed more light on them on the basis
of descriptive analysis and econometric modelling.

V- RESULTS

1. Descriptive Statistics

1.1 Summarize of database (Descriptive Statistics)

Page 11 of 23
In general, our database consists of 408 observations and very few explanatory variables do not
count the 408 observations. This is due to missing data. We can conclude that our dependent
variable is flatter than the normal distribution with a skewness of -0.6084 which means that the
distribution is more skewed to the left. In conclusion this does not cause a real problem in the
analysis of our study. We can then see this from the graph above.

1.2 Correlation between GDP and explanatory variable

In the correlation table, we see that the variables are almost well correlated except for the IDF
which is negatively correlated. We can affirm that the FDI is rather aimed at developing
countries such as Africa in order to increase their GDP (economic growth). In our case, our
study focuses on the majority of developed countries. This is a general conclusion but, in most
cases, FDI, as its name suggests, is a driving force behind the multinationalisation of firms and
covers both the creation of subsidiaries abroad and cross-border mergers and acquisitions or
other financial relationships, including intra-group loans and borrowings.
Page 12 of 23
While the effect of FDI is generally considered to be positive on the growth of host countries, particularly
thanks to induced technology transfers, it is more debated and ambiguous on international trade, on employment
in the investor countries, on working conditions and on the environment.

1.3 The distribution of the correlation between GDP and ICT

From this graph, we can say that there is a

cloud dispersion between GDP and Investment
in information and communication. We cannot
assert a perfect correlation without an
econometric analysis of the real effect of this
variable on economic growth, so the
econometric analysis of investment in
information and communication on GDP is
very important.

1.4 Distribution of people with access to the internet and GDP

We can say that population access to the

internet and GDP are well correlated and
follow a normal distribution. We can see on
the graph a slight dispersion of some points
or clouds of points. In conclusion, this does
not necessarily mean that our variable has a
significant effect on economic growth
because a study by INSEE proves the contrary
in terms of the percentage of participation in
GDP. We will come back to this in the
econometric analysis.

Page 13 of 23
1.5 Distribution of the ICT and Human Capital

From this graph we can see that the more there

is investment in communication, information
and technology, the more human capital grows
positively. When the state invests in technology,
communication, human capital (education,
health,...) experiences an evolution and could
therefore positively affect economic growth
(national GDP). In other words, the state's way
of life (the state economy) is doing very well.

1.6 The graph of the Pop_ Internet and Human capital

Here we find a positive trend from our series.

We can say that access to the Internet has a
positive impact on Human Capital.

Page 14 of 23
1.7 The distribution of the FDI and ICT

From this graph we can see that FDI and

ICT are well correlated. This means that
FDI is mainly aimed at technology sectors
and industries in order to increase the
country's economic growth. We have not
been exhaustive in the descriptive
interpretation of the results, but in the
next chapter we will give more details
using the econometric model.

II- Econometric Part

A- Multicollinearity:

From this table we can see that the VIF is less than 5 or the mean VIF less than 3. We
conclude that there is no multicolinearity problem.

Page 15 of 23
 B- Hausman Test:

From the Hausman table, we conclude that the p-value is less than 10% and therefore we
reject the null hypothesis and consequently we reject the random effect consistent model. We
easily choose the fixed effect for the analysis of our study.

C- Fixed effect

Variables Random effect Fixed effect

Page 16 of 23
Variable Random Fixed effect

The analysis of this table reveals that our model is

globally significant (Prob> F=0.0000 lower than 5%).
When we take our fixed effect model, lnExtech,
Popinternet, lnHC which represent respectively (high
technology export, internet access by the population,
human capital) are significant at the 5% level and lnICT
and FDI are not significant. While in addition to these
variables, ictgoodexport and ictgoodimport are also
significant when we take the random effect model. The
analysis of our study impact of investment in
information and technology on GDP for the OECD
countries reveals from our regression that the more
high-tech exports, the more advanced technology, the
more the GDP rate increases by 14.1%. In other words,
the state encouraging the export of these technologies
would lead to an acceleration of economic growth
(example of China today).
Subsequently, access to an internet by the population
or businesses is an advantage for economic growth.

What we see here from our result is that access to the internet from home or in business decreases
GDP very slightly (0.002), i.e. does not have a positive impact on GDP as such nowadays. This is in
line with a study conducted by INSEE 2016. To this end, companies that sell exclusively online have
tax optimization techniques aimed at locating as much revenue as possible in a tax-friendly country,
which distorts the real distribution of sales, and thus their inclusion in a country's GDP. On the other
hand, "the resale of second-hand goods between individuals is not intended to be counted in GDP, for
the simple reason that there is no new production but simply the exchange of goods already produced.
Only a possible commission charged on the connection between the two parties can be accounted for
in GDP. The exchange of services between Internet users, another facet of the online economy, has
"a very limited impact on GDP". Carpooling, for example, is governed by the law, which prohibits
charging a carpooler more than the cost of gas and tolls.
Human capital is a real driver of a country's development and in turn of its GDP. When we take our
regression, we find that when the growth rate of human capital increases by 1%, the growth rate of
GDP increases by 10.1%. This is in line with a study by the Institute for Health Metrics and Evaluation
which states that investing in health and education is the best way to ensure long-term economic
growth.
Finally, the analysis of investment in information and communication on economic growth highlights
a particular access to human capital and the possession of high-level technologies that would facilitate,
for example, the health and education sector for a sustainable development (economic enhancement).

Page 17 of 23
Conclusion:
This paper focuses on the analysis of investment in information and communication in OECD
member countries. The results of the growth model estimations with ICT, Human Capital,
Population Internet access, etc. as explanatory variables using the panel data method in the
context of OECD member countries show that ICT (High Tech) and especially Human Capital
have a significant effect on economic growth.
In general, OECD member countries should give importance to international trade as
international trade plays an important role in the dispersion of ICTs and allows domestic
producers and consumers to have access to more diversified goods and services at acceptable
prices. Policy makers should encourage free trade by reducing tariffs and eliminating non-tariff
barriers to ICT imports, thereby facilitating ICT development. In a country where technology
is high, education and health, i.e. human capital, are enhanced and best facilitate economic
growth and subsequently sustainable development.

Page 18 of 23
REFERENCES:

[1] Ebrahim and Majid, 2009.The Effect of ICT on Economic Growth: Further Evidence.

[2] Ivo De Loo and Luc Soeto, 1999. The Impact of Technology on Economic Growth: Some
New Ideas and Empirical Considerations.

[3] Hülya Kesici ÇalÕúkan, 2015. Technological Change and Economic Growth.

[4] Henry Ukwuoma , 2019.The Effect of ICT on Economic Growth in Nigeria.

[5] Detschew, S. 2008. Impact of ICT in the developing countries on the economic growth.

[6] World Bank, (2006), World Development Indicator 2006, World Bank.

[7] INSEE, database (2016)

[8] OCDE Database

[9] World Information technology services Alliance, 2003. Digital Planet 2002, WITSA.

[10] M. Moradi, M. Kebryaee Published2009 Economics Information and communications

technology (ICT)

[11] Elster 1983, Evolutionniste et marxiste du changement technique.

[12] David and Arthur 1989, Evolution des technologies.

[13] Quah, D. 2002. Technology dissemination and economic growth : some lessons for the
New Economy, in Technology and the New Economy, ed. Chong-En Bai and Chi-Wa Yuen
Cambridge: MIT Press chapter 3, pp.95-156.

[14] Pohjola, M., 2002. The New economy: Facts, impacts and polities, Information
Economics and Policy, No 14, PP 133-144.

[15] ITU, 2003. World telecommunication indicators, International telecommunication

Union.

Page 19 of 23
Appendix:

Page 20 of 23
Page 21 of 23
Page 22 of 23
Page 23 of 23