DO INFORMATION AND COMMUNICATION TECHNOLOGIES FOSTER ECONOMIC GROWTH IN INDONESIA?

  • Badri Narayan Rath Indian Institute of Technology Hyderabad
  • Danny Hermawan Bank Indonesia
Keywords: ICT development, Economic growth, ICT exports, ARDL bound test, Indonesia

Abstract

This paper investigates, using annual data from 1980 to 2014, whether adoption of information and communication technologies (ICT) fosters economic growth in Indonesia. We employ an Autoregressive Distributed Lag cointegration technique on an augmented neoclassical growth model. The empirical results indicate a positive effect of ICT development on economic growth in both the long-run and short-run. The other regressors, such as total factor productivity, human capital, and capital per worker, also positively affect economic growth. From a policy perspective, the Indonesian government should promote ICT development through greater investment.

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Published
2019-04-30
Section
Articles