Impact of Information and Communication Technologies on Country Development: Accounting for Area Interrelationships

Authors:
Robert Kauffman;Ajay Kumar
Affiliations:
W.P. Carey School of Business, Arizona State University;State Government of Kerala, India
Venue:
International Journal of Electronic Commerce
Year:
2008

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Abstract

Single-item composite indices gauge ICT readiness at the country level but do not represent the direct impact of ICTs on a country's development. This paper describes a new approach to measuring the macrolevel impacts of ICTs across a range of development areas. The indirect effects of one area on others is taken into consideration by a simultaneous equation model that permits the inclusion of multiple development areas. The model is applied to data pertaining to four development areas in 64 countries: trade flows, agricultural productivity, R&D, and quality of life. ICT readiness is found to have a positive association with trade flows and R&D, but the impact depends on the country's development level. The strengths and limitations of this modeling approach, and the implications of the results, are assessed.