The purpose of this paper is to examine the Information and Communication Technology (ICT) capital-economic growth nexus, taking into consideration the previously documented nonlinear relationship between initial income and human capital on the one hand and economic growth on the other. We apply nonparametric techniques for a number of OECD countries for the period 1980-2004. Speci…cation tests provide evidence in favor of the semiparametric speci…cation in which initial income, human capital and ICT capital enter nonlinearly. We would like to thank an anonymous referee for the suggestions and comments on the paper which were very helpful.
In this paper we compare the impact of hardware, software, and communication equipment, widely referred to as information and communication technologies (ICT), on economic growth among the advanced industrialized countries. We use nonparametric techniques that allow us to estimate the output elasticities of ICT and human capital directly for each country and time period in our sample. Our results indicate that countries with high levels of ICT capital have high output elasticities of human capital. In addition, countries with high levels of human capital have high output elasticities of ICT, a result suggesting complementarity between the two.
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