Leapfrogging into knowledge economy: Information and communication technology for human development
Modern-day economic growth is focused on productivity and innovation, which puts information and technology integral to economic policy issues. In this context, ICT has a significant position as it increases efficiency, promotes information dissemination, and enhances innovation, resulting in a global shift in social and human development processes. The purpose of this research is to examine the significance of ICT diffusion in fostering human development in the South Asian Association for Regional Cooperation (SAARC) countries from 2005 to 2019. ICT diffusion is measured using a principal component analysis (PCA)- based composite index that combines telephone, mobile, broadband, and internet usage. The United Nations Development Programme (UNDP) created Human Development Index (HDI) serves as a proxy for human development. To adjust for any confounding bias, macroeconomic indicators, such as gross domestic product (GDP), inflation, and trade are also included. Utilizing econometric methods robust to cross-sectional dependence (CSD) such as the dynamic common correlated effect (DCCE) estimator, Driscoll-Kraay (DK) regression, and the Dumitrescu-Hurlin (DH) causality test, the study highlights the strong positive relationship between ICT and HDI. In addition, GDP boosts HDI owing to productivity gains. Similarly, trade expansion, in addition to its direct effects, also influences HDI by boosting economic growth. Inflation, on the other hand, has a negative impact on the HDI. Consequently, the study recommends a cohesive setting that unifies ICT with human development in this modern framework.
Abbas, S. Z., Kousar, A., Razzaq, S., Saeed, A., Alam, M., & Mahmood, A. (2018). Energy management in South Asia. Energy Strategy Reviews, 21, 25–34. https://doi.org/https://doi.org/10.1016/j.esr.2018.04.004
Alfaro, L., Kalemli-Ozcan, S., & Volosovych, V. (2008). Why Doesn’t Capital Flow from Rich to Poor Countries? An Empirical Investigation. The Review of Economics and Statistics, 90(2), 347–368. https://doi.org/10.1162/rest.90.2.347
Asongu, S. A. (2021). The Effects of Mobile Phone Technology, Knowledge Creation and Diffusion on Inclusive Human Development in Sub-Saharan Africa. Journal of the Knowledge Economy, 12(3), 1367–1398. https://doi.org/10.1007/s13132-020-00668-8
Asongu, S. A., & Le Roux, S. (2017). Enhancing ICT for inclusive human development in Sub-Saharan Africa. Technological Forecasting and Social Change, 118, 44–54. https://doi.org/10.1016/j.techfore.2017.01.026
Badri, A. K., Badri, P. K., & Cham, M. (2019). ICT and Human Development in Selected Devolving Countries. International Journal of Social Sciences Perspectives, 5(2), 30–35. https://doi.org/10.33094/7.2017.2019.52.30.35
Balouza, M. (2019). The Impact of Information and Communication Technologies on the Human Development in the Gulf Cooperation Council Countries: An Empirical Study. Management Studies and Economic Systems, 4(2), 79–113. https://doi.org/10.12816/0055079
Baltagi, B. H., Feng, Q., & Kao, C. (2012). A Lagrange Multiplier test for cross-sectional dependence in a fixed effects panel data model. Journal of Econometrics, 170(1), 164–177. https://doi.org/10.1016/j.jeconom.2012.04.004
Bankole, Felix O., Shirazi, F., & Brown, I. (2011). Investigating the Impact of ICT Investments on Human Development. The Electronic Journal of Information Systems in Developing Countries, 48(1), 1–19. https://doi.org/10.1002/j.1681-4835.2011.tb00344.x
Bankole, Felix Olu, Brown, I., & Osei-Bryson, K.-M. (2011). The impact of ICT infrastructure on human development: an analysis of ICT-Use in SADC countries. Proceedings of the 11th International Conference on Social Implications of Computers in Developing Countries, Kathmandu, Nepal, November 2016.
Bankole, Felix Olu, Thomas, I., & Brown, J. (2011). The impact of ICT infrastructure on human development: an analysis of ICT-Use in SADC countries. November 2016.
Bedir, S. (2016). Healthcare Expenditure and Economic Growth in Developing Countries. Advances in Economics and Business, 4(2), 76–86. https://doi.org/10.13189/aeb.2016.040202
Bhattacharya, A. (2021). Impact of Information and Communication Technology on Human Development: A Cross-Country Analysis. Comparative Advantage in the Knowledge Economy, 97–111. https://doi.org/10.1108/978-1-80071-040-520210009
Bloom, D. E., & Canning, D. (2000). The Health and Wealth of Nations. Science, 287(5456), 1207–1209. https://doi.org/10.1126/science.287.5456.1207
Bollou, F. (2006). ICT Infrastructure Expansion in Sub-Saharan Africa: An Analysis of Six West African Countries from 1995 to 2002. The Electronic Journal of Information Systems in Developing Countries, 26(1), 1–16. https://doi.org/10.1002/j.1681-4835.2006.tb00174.x
Bollou, F., & Ngwenyama, O. (2008). Are ICT investments paying off in Africa? An analysis of total factor productivity in six West African countries from 1995 to 2002. Information Technology for Development, 14(4), 294–307. https://doi.org/10.1002/itdj.20089
Breusch, T. S., & Pagan, A. R. (1980). The Lagrange Multiplier Test and its Applications to Model Specification in Econometrics. The Review of Economic Studies, 47(1), 239–253. https://doi.org/10.2307/2297111
Chudik, A., & Pesaran, M. H. (2015). Common correlated effects estimation of heterogeneous dynamic panel data models with weakly exogenous regressors. Journal of Econometrics, 188(2), 393–420. https://doi.org/10.1016/j.jeconom.2015.03.007
Donou-Adonsou, F. (2019). Technology, education, and economic growth in Sub-Saharan Africa. Telecommunications Policy, 43(4), 353–360. https://doi.org/10.1016/j.telpol.2018.08.005
Douglas, A. C., Mills, J. E., Niang, M., Stepchenkova, S., Byun, S., Ruffini, C., Lee, S. K., Loutfi, J., Lee, J. K., Atallah, M., & Blanton, M. (2008). Internet addiction: Meta-synthesis of qualitative research for the decade 1996-2006. Computers in Human Behavior, 24(6), 3027–3044. https://doi.org/10.1016/j.chb.2008.05.009
Driscoll, J. C., & Kraay, A. C. (1998). Consistent Covariance Matrix Estimation with Spatially Dependent Panel Data. The Review of Economics and Statistics, 80(4), 549–560. https://doi.org/10.1162/003465398557825
Dumitrescu, E., & Hurlin, C. (2012). Testing for Granger non-causality in heterogeneous panels ☆. Economic Modelling, 29(4), 1450–1460. https://doi.org/10.1016/j.econmod.2012.02.014
Farooqi, Z. Ud., Makhdum, M. S. A., & Yaseen, M. R. (2020). Impact of Information and Communication Technology (ICT) Investment on different Components of Human Development in Developing Countries. International Review of Management and Business Research, 9(4), 108–129. https://doi.org/10.30543/9-4(2020)-11
Gupta, S., Jain, M., & Nagpal, A. (2019). An empirical investigation on associated linkage between human development and ICT: A South Asian perspective. 96167.
Hwang, W. S., & Shin, J. (2017). ICT-specific technological change and economic growth in Korea. Telecommunications Policy, 41(4), 282–294. https://doi.org/10.1016/j.telpol.2016.12.006
Jawaid, S. T., & Waheed, A. (2017). Contribution of International Trade in Human Development of Pakistan. Global Business Review, 18(5), 1155–1177. https://doi.org/10.1177/0972150917710345
Kaiser, H. F. (1974). An index of factorial simplicity. Psychometrika, 39(1), 31–36. https://doi.org/10.1007/BF02291575
Kao, C. (1999). Spurious regression and residual-based tests for cointegration in panel data. Journal of Econometrics, 90(1), 1–44. https://doi.org/10.1016/S0304-4076(98)00023-2
Kessler, R. C., Aguilar-Gaxiola, S., Alonso, J., Chatterji, S., Lee, S., & Ustün, T. B. (2009). The WHO World Mental Health (WMH) Surveys. Psychiatrie (Stuttgart, Germany), 6(1), 5–9.
Khodabakhshi, A. (2011). Relationship between GDP and Human Development Indices in India. International Journal of Trade, Economics and Finance, 2(3), 251–253. https://doi.org/10.7763/ijtef.2011.v2.111
Latif, Z., Xin, W., Danish, K., Iqbal, K., Pathan, Z. H., Salam, S., & Jan, N. (2017). Ict and sustainable development in south asian countries. Human Systems Management, 36(4), 353–362. https://doi.org/10.3233/HSM-17166
Lee, S. O., Hong, A., & Hwang, J. (2017). ICT diffusion as a determinant of human progress*. Information Technology for Development, 23(4), 687–705. https://doi.org/10.1080/02681102.2017.1383874
Lenka, S. K. (2015). Measuring financial development in India: A PCA approach. Theoretical and Applied Economics, 22(1), 205–216.
Maiti, D., & Awasthi, A. (2020). ICT Exposure and the Level of Wellbeing and Progress: A Cross Country Analysis. In Social Indicators Research (Vol. 147, Issue 1). Springer Netherlands. https://doi.org/10.1007/s11205-019-02153-5
Makoza, F., & Chigona, W. (2013). The Outcomes of ICT Diffusion and Human Development in Malawi. International Journal of Information Communication Technologies and Human Development, 4(4), 52–70. https://doi.org/10.4018/jicthd.2012100105
Malik Khalid. (2013). United Nations Development Programme: Human Development Report 2013: The Rise of the South: Human Progress in a Diverse World. In Population and Development Review (Vol. 39, Issue 3). United Nations Development Programme. https://doi.org/10.1111/j.1728-4457.2013.00624.x
Mohsin, M., Zhou, P., Iqbal, N., & Shah, S. A. A. (2018). Assessing oil supply security of South Asia. Energy, 155, 438–447. https://doi.org/https://doi.org/10.1016/j.energy.2018.04.116
Mora-Rivera, J., & García-Mora, F. (2021). Internet access and poverty reduction: Evidence from rural and urban Mexico. Telecommunications Policy, 45(2), 102076. https://doi.org/10.1016/j.telpol.2020.102076
Mosa, M., Yoo, I., & Sheets, L. (2012). A systematic review of healthcare applications for smartphones. BMC Med.Inf. Decision Making. BMC Medical Informatics and Decision Making, 12(67), 1–31. http://www.biomedcentral.com/1472-6947/12/67
Msila, V. (2015). Teacher Readiness and Information and Communications Technology (ICT) Use in Classrooms: A South African Case Study. Creative Education, 06(18), 1973–1981. https://doi.org/10.4236/ce.2015.618202
Mustafa, G., Rizov, M., & Kernohan, D. (2017). Growth, human development, and trade: The Asian experience. Economic Modelling, 61(December 2016), 93–101. https://doi.org/10.1016/j.econmod.2016.12.007
Ngwenyama, O., Andoh-Baidoo, F. K., Bollou, F., & Morawczynski, O. (2006). Is There A Relationship Between ICT, Health, Education And Development? An Empirical Analysis of five West African Countries from 1997-2003. The Electronic Journal of Information Systems in Developing Countries, 23(1), 1–11. https://doi.org/10.1002/j.1681-4835.2006.tb00150.x
Niebel, T. (2018). ICT and economic growth – Comparing developing, emerging and developed countries. World Development, 104, 197–211. https://doi.org/10.1016/j.worlddev.2017.11.024
Osiakwan, R. O., & Armah, S. E. (2013). Clearing the Muddy Waters: An attempt to decompose the impacts of inflation on the Ghanaian economy and on the welfare of Ghanaian citizens in light of recent political rhetoric on inflation. Journal of Economic Development, Management, IT, Finance and Marketing, 5(2), 32–65.
Park, Y., Meng, F., & Baloch, M. A. (2018). The effect of ICT, financial development, growth, and trade openness on CO(2) emissions: an empirical analysis. Environmental Science and Pollution Research International, 25(30), 30708–30719. https://doi.org/10.1007/s11356-018-3108-6
Pedroni, P. (2004). Panel cointegration: asymptotic and finite sample properties of pooled time series tests with an application to the ppp hypothesis. Econometric Theory, 20(3), 597–625. https://doi.org/10.1017/S0266466604203073
Pesaran, M. H. (2004). General Diagnostic Tests for Cross Section Dependence in Panels. Center for Economic Studies & Ifo Institute for Economic Research CESifo, Working Pa, 1–39.
Pesaran, M. H. (2006). Estimation and Inference in Large Heterogeneous Panels with a Multifactor Error Structure. Econometrica, 74(4), 967–1012. https://www.jstor.org/stable/3805914
Pesaran, M. H. (2007). A Simple Panel Unit Root Test in the Presence of Cross-Section Dependence. Journal of Applied Econometrics, 22(2), 265–312. http://www.jstor.org/stable/25146517
Pesaran, M. H., Shin, Y., & Smith, R. P. (1999). Pooled Mean Group Estimation of Dynamic Heterogeneous Panels. Journal of the American Statistical Association, 94(446), 621–634. https://doi.org/10.1080/01621459.1999.10474156
Pesaran, M. H., & Smith, R. (1995). Estimating long-run relationships from dynamic heterogeneous panels. Journal of Econometrics, 68(1), 79–113. https://doi.org/https://doi.org/10.1016/0304-4076(94)01644-F
Pohjola, M. (2001). Information Technology and Economic Growth: A Cross-Country Analysis. In Information Technology, Productivity, and Economic Growth. Oxford University Press. https://doi.org/10.1093/acprof:oso/9780199243983.003.0011
Pradhan, R. P., Arvin, M. B., & Hall, J. H. (2016). Economic growth, development of telecommunications infrastructure, and financial development in Asia, 1991-2012. Quarterly Review of Economics and Finance, 59, 25–38. https://doi.org/10.1016/j.qref.2015.06.008
Pradhan, R. P., Arvin, M. B., & Norman, N. R. (2015). The dynamics of information and communications technologies infrastructure, economic growth, and financial development: Evidence from Asian countries. Technology in Society, 42, 135–149. https://doi.org/10.1016/j.techsoc.2015.04.002
Pradhan, R. P., Mallik, G., & Bagchi, T. P. (2018). Information communication technology (ICT) infrastructure and economic growth: A causality evinced by cross-country panel data. IIMB Management Review, 30(1), 91–103. https://doi.org/10.1016/j.iimb.2018.01.001
Qureshi, M. A., Qureshi, J. A., Ahmed, A., Qaiser, S., Ali, R., & Sharif, A. (2020). The Dynamic Relationship Between Technology Innovation and Human Development in Technologically Advanced Countries: Fresh Insights from Quantiles-on-Quantile Approach. Social Indicators Research, 152(2), 555–580. https://doi.org/10.1007/s11205-020-02451-3
Ranis, G. (2000). Economic Growth and Human Development. World Development, 28(2), 22–54. https://doi.org/10.23943/princeton/9780691166377.003.0002
Romer, P. M. (1990). Endogenous technological-change. Journal of Political Economy, 98(5), 71–102. https://doi.org/10.1086/261725
Salanova, M., Llorens, S., & Ventura, M. (2014). Technostress: The Dark Side of Technologies. In C. Korunka & P. Hoonakker (Eds.), The Impact of ICT on Quality of Working Life (pp. 87–103). Springer Netherlands. https://doi.org/10.1007/978-94-017-8854-0_6
Samoilenko, S., & Osei-Bryson, K. M. (2008). Increasing the discriminatory power of DEA in the presence of the sample heterogeneity with cluster analysis and decision trees. Expert Systems with Applications, 34(2), 1568–1581. https://doi.org/10.1016/j.eswa.2007.01.039
Sarangi, A. K., & Pradhan, R. P. (2020). ICT infrastructure and economic growth: a critical assessment and some policy implications. Decision, 47(4), 363–383. https://doi.org/10.1007/s40622-020-00263-5
Schwab, K. (2018). The Global Competitiveness Report. In World Economic Forum.
Sepehrdoust, H., & Ghorbanseresht, M. (2019). Impact of information and communication technology and financial development on economic growth of OPEC developing economies. Kasetsart Journal of Social Sciences, 40(3), 546–551. https://doi.org/10.1016/j.kjss.2018.01.008
Solow, R. M. (1956). A Contribution to the Theory of Economic Growth. The Quarterly Journal of Economics, 70(1), 65–94. http://www.jstor.org/stable/1884513
Usman, O., Alola, A. A., & Sarkodie, S. A. (2020). Assessment of the role of renewable energy consumption and trade policy on environmental degradation using innovation accounting: Evidence from the US. Renewable Energy, 150, 266–277. https://doi.org/10.1016/j.renene.2019.12.151
Verma, A., & Giri, A. K. (2020). ICT diffusion, financial development, and economic growth: Panel evidence from SAARC countries. Journal of Public Affairs, November, 1–11. https://doi.org/10.1002/pa.2557
Westerlund, J. (2007). Testing for error correction in panel data. Oxford Bulletin of Economics and Statistics, 69(6), 709–748. https://doi.org/10.1111/j.1468-0084.2007.00477.x
World Bank. (2007). Building Knowledge Economies Advanced Strategies for Development. The World Bank. https://doi.org/10.1596/978-0-8213-6957-9
Yakunina, R. P., & Bychkov, G. A. (2015). Correlation Analysis of the Components of the Human Development Index Across Countries. Procedia Economics and Finance, 24(July), 766–771. https://doi.org/10.1016/s2212-5671(15)00692-9
Yorulmaz, R. (2018). An analysis of constructing global financial inclusion indices. Borsa Istanbul Review, 18(3), 248–258. https://doi.org/10.1016/j.bir.2018.05.001
Zhang, J., & Danish. (2019). The dynamic linkage between information and communication technology, human development index, and economic growth: evidence from Asian economies. Environmental Science and Pollution Research, 26(26), 26982–26990. https://doi.org/10.1007/s11356-019-05926-0
Ziaie, P. (2013). Challenges and issues of ICT industry in developing countries based on a case study of the barriers and the potential solutions for ICT deployment in Iran. 2013 International Conference on Computer Applications Technology (ICCAT), 1–6. https://doi.org/10.1109/ICCAT.2013.6521973
AJIS publishes open-access articles distributed under the terms of a Creative Commons Non-Commercial and Attribution License which permits non-commercial use, distribution, and reproduction in any medium, provided the original author and AJIS are credited. All other rights including granting permissions beyond those in the above license remain the property of the author(s).