The impact of information and communication technologies on total factor productivity: The case of Türkiye

This study examines the impact of information and communication technologies (ICT) on total factor productivity (TFP) in the context of the Turkish economy. Based on time series analysis covering the 1990-2024 period, the research aims to evaluate the contribution of ICT to productivity growth along with complementary factors. The theoretical framework of the study is built upon endogenous growth theories, knowledge economy dynamics, and technological diffusion mechanisms. The effect of ICT investments influencing the productivity dynamics of the Turkish economy is measured through a composite index consisting of internet usage, mobile subscriptions, and fixed broadband access indicators. Additionally, the effects of complementary factors such as human capital, foreign direct investments, and trade openness on TFP and their interactions with ICT are analyzed. FMOLS (Fully Modified Ordinary Least Squares) and CCR (Canonical Cointegrating Regression) methods, which take into account cointegration relationships, are used in the econometric analyses. The findings of the research indicate that ICT investments have a statistically significant and positive effect on TFP in Turkey. According to the FMOLS method, a 1% increase in the ICT level leads to an approximate 0.024% increase in TFP. Similarly, human capital also has a strong positive effect on TFP. While foreign direct investments positively affect TFP, this effect is more limited compared to other variables. As a notable finding, trade openness unexpectedly shows a negative effect on TFP. This suggests that Turkey's foreign trade structure does not have a quality that supports productivity growth. The research results reveal that for sustainable productivity growth in Turkey, it is necessary to strengthen digital infrastructure investments, develop human capital, encourage qualified foreign direct investments, and transform the foreign trade structure towards high value-added products. The effect of ICT on productivity is closely related not only to technological infrastructure but also to institutional structures, human capital, and foreign trade policies. In this context, addressing digital transformation strategies with an integrated.