The effects of ICT* on output per worker: A study of the Chinese economy

In this paper, we explore the short-run and long-run contribution of five indicators of information and communication technology (ICT*) on economic growth of China over the sample period 1980-2013. We use the augmented Solow (1956) framework, the ARDL bounds (Pesaran, Shin, & Smith, 2001) approach to cointegration and the Toda and Yamamoto (1995) granger non-causality tests to examine the possible linkages. The results show evidence of long-run association among level variables for all the indicators of ICT*. From the results, we also note that all the indicators of ICT* have a positive and statistically significant elasticity coefficient ranging from 0.010 to 0.080. From the Granger causality results, we note bidirectional causality between mobile cellular, telecommunication and economic growth; and between mobile cellular, telecommunication and capital per worker, respectively. Other results indicate that fixed broadband cause capital accumulation; capital accumulation causes internet technology. We also note bidirectional causality between mobile cellular and telecommunication, and between fixed broadband and internet, respectively; and a unidirectional causality from Internet and fixed broadband to hi-tech exports; and from mobile cellular and telecommunication to fixed broadband, respectively. From the overall results, within caveats, we highlight that while all the indicators of ICT* are imperative for long-run growth, besides capital per worker, the dominant technology drivers are mobile cellular and telecommunications technology. (C) 2015 Elsevier Ltd. All rights reserved.