Impact of ICT Access on Total Factor Productivity(TFP) in Asian Economies

Abstract

Link between Information and Communication Technology (ICT) and Total Factor Productivity (TFP) has been explored in detail. Particularly in the industrialized world, the productivity conundrum has received much attention. This study aims to shed light on this connection within the context of the productivity riddle by empirically evaluating the effect of ICT Access on Total Factor Productivity in Nine Developing Economies in Asia from 2000- 2018. The empirical research is based on a PCA representing the ICT Access and other control variables that can potentially impact growth of Total Factor Productivity (TFP). Study employed FE model with robust clustered standard errors. Outcomes designate that ICT Access, Investment (I), and, R&D impact the TFP growth of sample countries. The study contributes to the ICT and TFP relationship by dwelling deep into the component of ICT. The policy implications drawn from this research exercise point to the fact that ICT’s total impact on TFP can only be realized by increasing access to ICT thereby reducing the digital divide and making ICT accessible for all in a given economy