Recent studies of European countries indicate that the contribution of the ICT sectors to the regional economy is weakening and slowing economic growth. The present study investigates the contribution of the ICT sectors to economic performance in the European economies using Input-Output (IO) methodology. The results indicate that: (1) the multiplier effect of the ICT sectors on the rest of the economy declined significantly during the period 2000-2005 compared with 1995-2000; and (2) the decline in the output of the ICT sectors can be attributed to the loss of export advantages and technical change gains in the sectors. The results show an inability of the sectors to grasp the international market, most likely a consequence of the lack of anticipation of more rapid innovation in emerging countries.
The shadow economy can be defined as economic activities that escape detection in the official estimates of the Gross Domestic Product (GDP). A larger size of the informal sector poses a significant challenge for policymaking as it reduces the reliability of official estimators and increases the likelihood of adopting ineffective policies. Furthermore, the shadow economy may also influence the allocation of resources. The phenomenon is particularly bigger in the developing world. This paper aims to investigate a possible contribution of e-Government (eGov) to mitigate the problem of the shadow economy. We argue that eGov implementation will allow the government to reduce the administrative burden costs, reduce tax evasion and allow citizens to act as whistle-blowers, all of which may eventually lower the size of the shadow activities. Since the implementation of eGov corresponds to the stage of infrastructure development in the Information and Communications Technologies (ICTs), the diffusion of eGov also requires particular threshold points by which the impact can only be seen. We investigate the data of 147 countries during the period 2003-2013, where the data on estimated shadow economy (based on [1]) and eGov index (based on [2]) are both available. We found that increasing the eGov index significantly reduces the size of the shadow economy. Moreover, the marginal impact is greater in the developed and higher income countries. This sheds a light on the importance to achieve a sufficient level of critical mass in eGov infrastructure before countries are able to reap the benefits of the initiatives.
This paper aims to measure the impact of broadband speed on economic growth in the OECD countries. The macroeconomic indicators for this study were collected from OECD databases, except for the speed data, which were gathered from Ookla, a company that provides broadband testing and web-based network diagnostic applications data on a daily basis. With this, quarterly balanced panel data for 34 OECD countries during the period 2008-2010 were examined. The study found that the estimated coefficient of broadband speed is statistically significant. Doubling the broadband speed will contribute to 0.3% growth compared with the growth rate in the base year. The results convey that the impact of increasing broadband speed on GDP growth will largely depend on two aspects: (i) the size of the coefficient of the broadband speed (beta) and (ii) the existing economic growth in each country. Consequently, since the coefficient is linear, the impact will also be relatively greater for countries that experienced lower economic growth during previous years. Finally, the paper provides suggestions for future research in this vein and further calibration of future models.
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