The non-linear relationship between ICT diffusion and financial development

This research investigates the linear and non-linear effects of information and communication technology (ICT) diffusion on financial development for 81 countries over the period 1990–2015 by employing the generalized-momentum method (GMM) and panel smooth transition regression (PSTR). Some main conclusions are presented as follows. First, comparing the different effects of ICT on financial development between the high-income group and the middle- & low-income group, telephone and Internet positively influences both groups’ financial development, whereas mobile cellular causes a negative effect in high-income countries, but a positive effect in middle- & low-income countries. Second, the growth of the Internet and telephones raises the financial development in all regions, while mobile cellular growth positively affects financial development only in Africa. Finally, strong evidence appears that the PSTR models capture the smooth non-linear effects of ICT diffusion on financial development, in which the effect of ICT diffusion on financial development is positive in the lower level of ICT diffusion, but turns negative in the higher level of ICT diffusion.     

Factors of broadband development and the design of a strategic policy framework

The paper analyses the household use of broadband technology and services in EU countries in an attempt to find the main reasons which explain the differences seen among countries. With the use of factor analysis, the underlying factors are identified as: (1) enablers and means; (2) the use of services; and (3) the ICT sector's development. Based on these findings, a two-dimensional framework that enables the classification of policy actions depending on the influencing factor and type of influence is developed. The framework can be used to analyse what is the appropriate set of policies at the national and regional governmental levels leading towards the better diffusion of new broadband (BB) technologies and services.     

How advanced are Italian regions in terms of public e-services? The construction of a composite indicator to analyze patterns of innovation diffusion in the public sector

This paper applies an open and transparent methodology to construct a composite indicator for the analysis of the diffusion of ICT in the public sector and the development of public e-services across Italian regions. This methodology, based on OECD/EC-JRC Handbook and incorporating experts′ opinion into a Data Envelopment Analysis, will allow us to define a ranking of Italian regions in terms of ICT adoption and of e-service development. Data are obtained by merging four different surveys carried out by Between Co. (2010–2011) and Istat – Italy′s National Bureau of Statistics (2009). We add to extant empirical literature in three ways. First, we offer a comprehensive measurement of advances in digital government that is not circumscribed to a single domain (e.g. administrative procedures of public administrations) but is rather aimed to capture a wide spectrum of public e-services (e-government, e-education, Intelligent Transport Systems, e-health). Second, we tackle a major drawback of existing statistics and benchmarking studies which are largely based on the count of services provided online, by including more sophisticated indicators on the quality of services offered and on back office changes. The results – both in terms of scores and regional rankings – highlight the presence of different patterns of adoption and use of public e-services at the local level. Third, we offer a rich account of the extreme heterogeneity of public e-service development and of the underlying technological and organizational change at the sub-national level, and hence provide a basis for the differentiating policy measures across regions.     

Cloud computing and its impact on the Japanese macroeconomy–its oligopolistic market characteristics and social welfare

The cloud computing market is rapidly expanding and changing the nature of ICT across all sectors; cloud computing transforms ICT from a tool dependent upon investment and physical ownership to one that can easily make use of outside resources. On the other hand, cloud computing services are being provided not only for simple data storage, but for many purposes through several different service models, such as SaaS (Software as a Service), PaaS (Platform as a Service) and IaaS (Infrastructure as a Service). Due to, among other factors, the nature of its network externalities, the market seems to be gradually shifting to a market with oligopolistic characteristics in which the services are provided by a limited number of big-name firms. In this paper, the impact of the shift of the cloud computing market to a market with oligopolistic characteristics on utility-based social welfare is quantitatively estimated and analyzed utilizing DSGE (Dynamic Stochastic General Equilibrium) model-based simulation. The main objectives of the paper, rather than to ascertain the exact change of utility-based social welfare, are (1) to determine whether there is a (realistic) shifting path of macroeconomic variables in Japan’s case, under the shift and (2) to illustrate the dynamic interaction of the macroeconomic variables. Utility-based social welfare is chosen, because for the purpose of evaluating policy measures it would be more suitable than GDP. Also, several kinds of policy measures for the sound development of the cloud computing market that the industry and government can take are discussed in a sense related to a market with oligopolistic characteristics.     

ICT Co-evolution and Korean ICT strategy—An analysis based on patent data

This paper investigates the interactive nature of relationships between Information and Communications Technologies (ICTs) in terms of their technological innovations and diffusion. For the purpose, the United States Patent and Trademarks Office (USPTO) database was used and Lotka-Volterra equations were applied to the patent data, resulting in a Patent Interaction Network (PIN). This matrix was employed to investigate the interaction patterns among ICT-related industries, allowing co-evolution process across ICTs to be analyzed. This paper also examined patenting activities in the Korean ICT sector, which has announced the IT839 strategy to address ICT-related services, infrastructures and growth drivers. It is judged that the evolving pattern of Koran ICT has been compatible with the PIN, facilitating the development of each other. It is also expected that promoting broadband and home-network technologies, together with technologies on digital contents and software solutions, can lead to the growth of the whole ICT industry. Such research findings will provide numerous implications for policy-making and strategic planning for ICT development.     

The effect of the digital economy on services exports competitiveness and ternary margins

In the era of the digital economy, improving the level of information and communications technology (ICT) development is an important measure for achieving the high-quality development of the services exports. This study constructs a comprehensive development index for the digital economy based on the United Nations Conference on Trade and Development Statistics Database (UCTADstat) to calculate the services exports competitiveness of 75 countries (regions) around the world from 2010 to 2019 and conducts ternary margin decomposition. The study empirically verifies that the digital economy promotes the competitiveness of services exports, not only driving intensive growth of quantity margin and price margin but also enhances the expansion growth of category margin. Heterogeneity analysis reveals that the effect of the digital economy on improving low- and middle-income countries' services exports competitiveness and industries with low ICT intensity is more significant than that of high-income countries and high ICT-intensity industries. The impact of the digital economy on the ternary margin of countries’ different income levels and ICT-intensity sample groups exhibits differentiated estimation results. The conclusions of this study provide novel explanations regarding the effects of the digital economy in improving services exports competitiveness and new perspectives and evidence for strategic policymaking.     

Intangible capital,ICT and sector growth in China

This paper explores how intangible capital affects the growth of ICT-intensive sectors in China by examining 29 sectors in 30 regions for the years 2003–2015. It is shown that the value added in ICT-intensive sectors in China will grow faster in regions with faster development of intangible capital. This effect is robust to alternative measures of intangible capital and ICT intensity indicators, and even if other region-level determinants of sector growth such as human capital, non-ICT physical capital and financial market development are taken into consideration. The findings imply that Chinese policy makers should aim for not only more ICT investment but also the development of intangible capital.     

Exploring the structural effects of the ICT sector in the Greek economy: A quantitative approach based on input-output and network analysis

The aim of this paper is to present a quantification approach for the calculation of the ICT sector's structural effects in the economy, focusing on the case of Greece. We construct a composite sector using a hypothetical extraction methodology based on the most recent Greek input-output table and structural business statistics at the national level. Our framework builds on the formal definition of the ICT sector provided by OECD and includes two distinct sub-components, ICT manufacturing and ICT services. In the second stage of this study, we explore the production linkages among ICT services, ICT manufacturing and the rest of the Greek industries using input-output-based and network analysis-based metrics that build on the intermediate transactions of an expanded input-output table of the Greek economy that includes the two sectors. Our empirical findings suggest that the total ICT sector has a major contribution to the Greek economy in terms of GDP and employment, but this is driven mainly by the ICT services component. We further identify that ICT services are more integrated in the Greek production network compared to ICT manufacturing, but their production linkages are underperforming in terms of meaningful contribution to the activity of the rest of the sectors. These results reflect the low integration of digital technologies and can be further embedded in a discussion on the ICT deficiencies of the Greek economy and the need for targeted regulatory and financial interventions.     

Do R&D and ICT affect total factor productivity growth differently?

We analyze the effect of ICT and R&D on total factor productivity (TFP) growth across different industries in Sweden. R&D alone is significantly associated with contemporaneous TFP growth, thus exhibiting indirect effects. Although there is no significant short-run association between ICT and TFP, we find a positive association with a lag of seven to eight years. Thus, R&D affect TFP much faster than ICT-investments. We also divide ICT capital into hardware and software capital. To our knowledge, this distinction has not been made in any previous study analyzing TFP at the industry level. The results show that lagged hardware capital services growth is significantly associated with TFP growth. Hence, investments complementary to hardware are needed to reap the long-run TFP effects from reorganizing production.     

Convergence and determinants of ICT development in case of emerging market economies

This paper aims to examine the convergence of ICT development in the case of 27 emerging market economies (EMEs) using annual data from 2000 to 2018. First, by employing Phillips-Sul (PS) panel convergence test, the results not only support the evidence of convergence in ICT development but also find convergence in the composition of ICT development known as ICT access and ICT use. Second, the study identifies factors such as per capita income, human capital, and FDI which significantly affect ICT development. Third, results based on stochastic conditional convergence reveal that EMEs countries are not only converging among themselves but also ‘catch-up’ to the OECD countries.     

Financial development,ICT diffusion and economic growth: Lessons from MENA region

This paper aims to test jointly two economic puzzles: the effect of financial development and Information and Communication Technology (ICT) on economic growth. Theories predict a positive effect of financial development and ICT on growth but empirical studies on these relationships produced mixed results. Further, we investigate the interaction between financial development and ICT Diffusion to test whether the impact of financial development on growth is strengthened by better ICT infrastructure. In this paper we assess empirically these relationships in some MENA countries. The empirical study is based on estimation of a dynamic panel model with system GMM estimators. There are three main findings. First, our empirical results join empirical literature that find a negative direct effect of financial development on economic growth. This ambiguous relationship may be linked to many phenomenons but there are not yet clear explanations of this puzzle. Second, the estimates reveal a positive and significant direct effect of ICT proxies on economic growth. This implies that MENA countries need to reinforce their ICT policies and improve using of new Information and Communication Technology. Finally, the interaction between ICT penetration and financial development is found positive and significant in the growth regression. This implies that economies in Mena region can benefit from financial development only once a threshold of ICT development is reached.     

The impact of regional ICT development on job quality of the employee in China

The paper matches the province-level ICT development with the micro-level data of the China Family Panel Studies (CFPS), uses multiple indicators to measure ICT development and job quality, and investigates the impact of regional ICT development on job quality of the employee. The research conclusions are as follows: First of all, ICT development has a significant positive impact on job quality of the employee. After a series of robustness tests and dealing with endogeneity issues, the research conclusion continues to be valid. Second, when the job quality of the employee is poor, the promotion of ICT development is relatively strong. Third, ICT development has an indirect impact on job quality through the Internet awareness. Finally, ICT development has a relatively strong role in promoting job quality of women, older, non-agricultural, and medium-skill employees. From the policy perspective, in order to improve the job quality of the employee, we suggest promoting ICT development, narrowing the digital gap, increasing investment in education, and taking into account the different characteristics of employees.     

ICT interaction with trade,FDI and financial inclusion on inclusive growth in top African nations ranked by ICT development

The significance of ICT (information and communication technology) framework in efforts to attract foreign investment (FDI), sustain commerce, and boost financial inclusion for enhanced inclusive growth has revolutionized the global system recently. Furthermore, earlier researches on the connection between ICT and growth concentrated more on general expansion than on the kind of growth that is evenly distributed and has broader societal implications than merely growing the size of the overall economic pie. This study critically analyzes the connection between ICT diffusion and inclusive growth, considering the interactive impacts of trade openness, FDI, and financial inclusion on inclusive growth in top African nations ranked in terms of ICT development, so as to close the existing literature gap. An improved-GMM (generalized method of moments) technique, founded on panel data-set spanning the years 2000–2020, is used in the study. By employing PCA (principal component analysis) to measure inclusive growth, ICT diffusion, and financial inclusion indices, the study contributes to the body of prior research. The model also accounts for the heterogeneous impact of the interactive term between ICT diffusions and trade openness, FDI, and financial inclusion on inclusive growth. Overall, results indicate that while ICT diffusion, trade openness, FDI, and financial inclusion significantly and positively enhance inclusive growth at both the individual and interaction levels, inflation hinders it. The study suggests that policymakers should establish measures to advance ICT development, encourage trade openness, attract foreign direct investment, and improve financial inclusion because these measures have tendencies to support inclusive growth by opening up a number of opportunities.     

Inclusive growth in Sub-Saharan Africa: Exploring the interaction between ICT diffusion,and financial development

Despite the momentous rise in ICT diffusion, and financial development in sub-Saharan Africa (SSA), their plausible joint effect on inclusive growth have not been explored, leaving a lacuna in the literature. This study, therefore, examines the direct and indirect effects of ICT diffusion on inclusive growth in 42 SSA countries over the period 1980–2019. We provide evidence robust to several specifications from the dynamic system GMM to show that: (i) ICT skills, access and usage induce inclusive growth in SSA, and (ii) the effects of ICT skills, access and usage are enhanced in the presence of financial development. These findings remain the same when we focussed on financial institution access. Policy recommendations are provided in line with the region's green growth agenda and striving efforts at improving socioeconomic development.     

From aperture satellite to "Internet finance": Institutionalization of ICTs in China's financial sector since 1991

China's financial industries started the process of marketization only two decades ago, but by 2017 its financial technology or fin-tech sector had taken half of the global market. The exponential diffusion of information and communication technologies (ICTs) in Chinese financial contexts have generated new organizational structures and socio-political relations that have the capacity to change China's position in the world economy. Drawing upon the sociological concept of institutionalization, this paper examines how the Chinese state has integrated ICT diffusion in its formal policies and its informal rules in China's financial development since 1991. Further, it addresses the political and socio-economic consequences of these developments. Based on the analyses of government documents and sources, trade journals, and statistic data from business databases, this paper divides the Chinese institutionalization of financial technologies into three stages and identifies the primary actors and paradigms for ICT diffusions in each stage. ICT diffusion has been constitutive but also disruptive to the existing financial policies, instrumental to the commercialization of state-owned banks, and has gradually transformed into a set of formal and informal rules accepted by a network of professionals, corporations, and government agencies. The institutionalization of ICT diffusion has engendered the continuous adjustment of financial policies and propelled innovations in China's financial economy.     

Web-hosting market development status and its value as an indicator of a country's e-readiness

A country's e-readiness is essentially a measure of its business environment, a collection of factors that indicate how amenable a market is to Internet-based opportunities. An e-readiness assessment is based on several quantitative criteria, and among them the ICT market development indicators are considered as the most influential. Studies in the past have shown that the well-known indicators used for assessing the level of ICT market development in countries with emerging economy are not directly applicable. This paper provides another insight into the level of ICT market development in an emerging economy by analysing the adoption of web-hosting services in the country's business sector. The potential of such assessment to be as an indicator of the level of ICT development in a country is analysed. The underlying study of the web-hosting development was carried out as part of the European project WEBHOSTS. The approach applied and the findings were intended to be used as a decision support in locating and managing some of the risks in e-business development and potential investment by new entrants in a region that is accessing the developed part of Europe.     

Development of telecommunication and broadcasting infrastructure indices at the global level

The importance of information and communication technology (ICT) in economic development has been increasing rapidly along with the Internet and mobile telecommunication networks. ICT development is becoming a main growth factor of many countries. As they realize the importance of the ICT industry, developing nations work to catch up with established economies. Therefore, many nations are formulating an ICT-enhanced policy. This paper introduces a number of telecommunication and broadcasting sub-indices, which include the fixed telephone network, the Internet, and mobile networks, which are aggregated into a composite Telecommunication Index (TI). The indices are computed using principal component analysis and human development type index methods. The country rankings, by different ICT-related indices, help identify the strengths and weaknesses of infrastructure development such that each country can foster economic growth. The performance of TI is compared with several other indices, such as the digital access, human development, and ArCo technology indices. The type of indices affects the country ratings. Results suggest that the parametric index approach may be preferred over those methods in which the subjective weighted summation of normalized variables used (non-parametric indices).     

ICT technologies in Europe: A study of technological diffusion and economic growth under network theory

The sector of Information and Communication Technologies (ICT) is one of the key instruments for the development of an economy. The literature emphasizes its capacity for both increasing productivity and generating new sources of income and wealth (5 and 20 among others). Traditionally studies on the ICT sector have focused on the analysis of its economic impact, but not on its capacity as a “bridge” for information and knowledge flows across the economic network. Following Burt's approach (1992) on structural holes, the organization of the economic network defines where and for whom new opportunities lie. The structural hole methodology allows to analyze the capacity of the ICT sector as an enabler of technological diffusion and innovation. The results show that the European ICT sector not only is important for its intermediary role in the flow of information across the economic network, but also for its low level of dependency on other sectors.     

Sizing up information and communication technologies as agents of political development in sub-Saharan Africa

It is widely speculated that the emergence of modern information and communication technologies (ICTs) will boost political development in the developing world. This expectation anchors on solid foundation since, presumably, the ICT revolution would radically alter access to information, dislodge entrenched social cleavages, and unleash new patterns of citizen consciousness and civic engagement by hitherto marginalized mass publics, and orchestrate new and decisive political equilibriums. This research provides an empirical assessment of the impact of ICTs on political development in sub-Saharan Africa. The analysis suggests that speculation about the potential for ICTS to enhance political development in the sub-Sahara is not unrealistic. The levels of phone, computer, and Internet diffusion are associated with political development, although only the effect of the phone remains once other variables are specified. The phone is the most robust of all individual factors explaining variations in political development. However, the effect of ICTs on political development can neither be certified as revolutionary, nor can they be codified as panacea.     

Serving the poor: Multisided mobile service platforms,openness, competition,collaboration and the struggle for leadership

Four billion people at the base of the economic pyramid live on incomes below $3000 a year in local purchasing power, and more often than not, lack consistent access to services, such as water, healthcare, banking or agricultural know-how. Rapid advances in mobile technology offer the potential to mediate access to essential services. Through this research, the answers to the following question were explored: will mobile service platforms bridge the gap between service providers and people living at the base of the pyramid in developing countries? Anchored in interviews with 31 experts in the field of mobile and ICT, qualitative analysis starting from platform leadership to explain the role of mobile service platforms is presented: how operator, device and service provider centric platforms compete, collaborate and open up (or not) for delivering scalable services to the poor. Based on the analysis in this paper, it is portended that although operator centric platforms are in pole position, device centric platform providers, being astute innovators, are positioned to close the lead by presenting alternatives to bridge the gap in developing countries. This paper frames the current debate on M4D through the lens of platform theory, and aims to provide guidance to policy makers to improve access to services for the poor.