ICT infrastructure, innovation development and economic growth: a comparative evidence between two decades in OECD countries

Abstract

PurposeThe objective of this study is to examine the causal relationship between economic growth, information and communication technology (ICT) penetration and innovation development in OECD countries.Design/methodology/approachThis study incorporates data for 24 OECD countries from 2000 to 2018, which is divided into the earliest (2000–2009) and the latest (2010–2018) periods. The econometric methodologies of this study employ panel cointegration, estimation procedures and vector error-correction modelling to investigate the potential interconnections between ICT, innovation development and economic growth.FindingsThe results from the latest period illustrate that OECD countries have achieved positive and significant economic development from high ICT penetration, while results from the earliest period show that OECD countries were just beginning to enjoy the benefits of ICT penetration. Moreover, findings show that innovation development is highly significant in the latest period when promoting economic growth.Practical implicationsThe policy implications suggest that promoting ICT infrastructure establishment and expanding the innovation development may drive the process of economic development in OECD countries.Originality/valueThis study employs mobile and Internet penetration as the development of telecommunication which is in line with the enlargement of innovation to foster economic growth in OECD countries. Comparing the evidence from two decades provides significant value for policymakers and decision-makers regarding the advantages of technology expansion and innovation development to promote economic growth in recent conditions.

Economic issue and technological resilience of pre- and post-COVID-19

“…Thus, high levels of ICT improve economic growth. This result is consistent with the findings of Maneejuk and Yamaka (2020), Kurniawati (2021). In other words, the positive association between ICT and economic growth depends on the ICT infrastructure.…”

Does digital economy promote sustainable development: Case of EU countries?

“…in high-impact countries, this effect is supported, which is not in middle and low-income countries. These findings are supported by Kurniawati (2020), who did research on OECD (i.e. high-income) countries and concluded that those countries had reached positive and significant economic development from high ICT penetration.…”

City innovation ability and internet infrastructure development: Evidence from the “Broadband China” policy

“…Although the industrial sector's technological innovation efficiency is markedly increased by informatization, its product is heterogeneous, and thus, it differs as the industry changes (Bonanno, 2016). Kurniawati's (2020) study of OECD member countries for almost 20 years shows that internet infrastructure development can enhance the level of economic growth by promoting innovation in the early years, whereas Alexander Kleibrink et al (2015) confirmed that internet infrastructure facilitates strategic performance in EU member countries. Mowery and Simcoe (2002) argued that one of the fundamental reasons the United States is leading in the internet industry is internet infrastructure development.…”