ICT development and total factor productivity growth

Koyin Chang, Marc Tomljanovich, Yung Hsiang Ying*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


Total factor productivity (TFP) is essential for disentangling the determinants of economic growth, productivity, and the standard of living. Understanding the variations in TFP, however, is greatly challenging because of the many assumptions that comprise the theoretical growth framework. In this paper, we aim to explore the determinants of TFP growth for countries at different stages of information and communication technology (ICT) development. To address the endogenous nature of the associated growth variables, we implement a three-stage-least (3SLS) square panel regression to improve the efficiency and asymptomatic accuracy of the estimators. We find that transmission channels, such as financial openness and trade globalization, have contributed substantially to growth in both advanced and developing countries. However, we also discover that greater financial openness can undermine a country’s TFP growth if the financial system is not sufficiently developed. When time horizons are decomposed into pre-ICT development and post-ICT development periods, a significant crowding-out effect is observed between ICT investment and financial openness in the pre-period, implying that the allocation of resources is critical for countries in the developing stage. Trade and finance policies that are adopted by advanced and developed countries might not be ideal for underdeveloped countries. Discretion in choosing adequate policies regarding financial integration and trade liberalization is advised for these emerging countries.

Original languageEnglish
Article number3108
JournalJournal of Infrastructure, Policy and Development
Issue number3
Publication statusPublished - 2024


  • ICT development
  • aging population
  • total factor productivity

ASJC Scopus subject areas

  • Development
  • Social Sciences (miscellaneous)
  • Urban Studies
  • Public Administration


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