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 since1990s. Researches have found that ICT have remarkable effect on TFP in bothdeveloped and some of developing countries. The aim of this paper is to investigatethe impacts of ICT on the TFP in 37 developing countries using Panel Data methodin the period of 1995-2003. This paper uses three types of variables for ICT; fixedline phone penetration, network index and ICT capital stock (ICT infrastructure),internet penetration and ICT-use index (ICT usage), and ICT expenditure (spillovereffect) to estimate the benefits of ICT.Findings indicate fixed line phone and internet penetration, network index, ICTuseindex, ICT capital stock over total capital stock, human capital; saving rate andtrade openness have positive effect on the TFP in developing countries. Theelasticity of TFP relative to infrastructure and usage is 0.065 and 0.025 respectively.In other words, one percent improvement in infrastructure, usage and ICTexpenditure can increase TFP more than 0.09 percent.