ICT Diffusion, Industrialisation and Economic Growth Nexus: an International Cross-country Analysis

This study examines the ICT diffusion-industrialisation-economic growth nexus for 171 countries over the period 2000–2018. The panel data was divided into four income groups. For the analysis, the newly developed panel VAR in generalized method of moment (GMM) estimation approach was applied. Our findings suggest a long-run equilibrium relationship between the three variables. While a strong evidence of two-way causality among the three variables in the entire sample and four income groups were reported. The panel VAR results suggest that at global level, ICT diffusion has negative and positive impact on industrialisation and growth, respectively, while industrialisation has negative impact on growth. Thus, there is need to promote realistic policies that will enhance ICT diffusion and industrialisation concurrently in order to promote growth globally. An increase and improvement in ICT diffusion will encourage, facilitate and accelerate the process of industrialisation and aggregate output to move in similar direction globally.