The impact of the information and telecommunication technologies on economic growth: An application for developed and developing countries

Telecommunication investments are accepted as one of the important factors that induce the economic development. However it becomes highly discussible that information and telecommunication technologies are the determinants the long term growth in both developing and developed countries. The aim of this study is to research the relationship between the telecommunication infrastructure and economic growth for countries which have different income, development levels. Along with this purpose, the data collected from 138 countries at total in five different income groups is used with covering the period of the years 1991-2009. As a method, the dynamic panel data analysis which composes the facilities of the cross sectional analysis and the time series analysis is used. The findings obtained indicate that the information and telecommunication technologies are positive and significant determinants of growth for all income groups. This positive effect is higher in the less developed countries. Another result is that the information and telecommunication infrastructure is subject to the income conditions with diminishing return to scale. According to this, the less developed countries can benefit from the growth increasing impact of information and telecommunication technology investments more than the developed countries. In this sense, this study presents that especially in the less developed countries? development policies, the information and telecommunication technology investments should be involved.