FDI and ICT Effects on Productivity Growth: A Comparative Analysis of Developing and Developed Countries

Abstract

This article investigates for possible effects stemming from Foreign Direct Investment (FDI) and Information and Communication Technologies (ICT) on productivity growth. The analysis is based on panel data covering a sample of 42 developing and developed countries during the period 1993-2001. The growth accounting results indicate that the growth contribution of ICT was quite high for both developed and developing countries. On the contrary, the FDI contribution was relatively low. The econometric results showed a positive and significant impact of ICT in all groups, the effect being larger among developing countries. Positive and significant FDI effects were found in the group of developed countries, and positive but insignificant, among the developing ones.Cet article examine les effets de´coulant des investissements directs e´trangers (IDE) et des technologies de l'information et de la communication (TIC) sur la croissance de la productivite´. L'analyse repose sur des donne´es de panel concernant 42 pays de´veloppe´s et en de´veloppement sur la pe´riode 1993-2001. Les re´sultats obtenus par la me´thode de la comptabilite´de la croissance indiquent que la contribution des TIC a`la croissance e´tait assez forte tant pour les pays de´veloppe´s que les pays en de´veloppement. A l'inverse, la contribution des IDE a`la croissance e´tait relativement faible. Les re´sultats e´conome´triques ont montre´un impact des TIC significatif et positif sur toutes les cate´gories, avec un effet plus marque´en ce qui concerne les pays en de´veloppement. L'impact des IDE e´tait significatif et positif pour le groupe des pays de´veloppe´s et positif mais non significatif pour les pays en de´veloppement.

ICT diffusion and the finance–growth nexus: a panel analysis on ECOWAS countries

“…In relation to economic growth, ICT influences economic growth and business value and enhances innovation through diffusion processes, usage practices and commercial success [27]. Dimelisa and Papaioannou [17] have linked the new information economy of the past decades to increased ICT diffusion and higher productivity gains and increased growth. Michael et al [41] anticipated that ICT skills will be at the core of the required skills in the near future, where the incorporation of ICT literacy will be essential to the development of learning skills, difficulty management, problem-solving and critical, innovative and systemic thinking towards the goal of developing cognitive and problem-solving skills.…”

The Relationship among Information and Communication Technologies and GDP in Middle East Countries: Panel Cointegration Approach

“…Consequently, the regression analysis will be carried on by decomposing the overall effect of total capital to that of its individual domestic, foreign and ICT components. Thus, following the paradigm of Hall and Mairesse (1995), Dimelisa and Papaioannou (2010) an aggregate Cobb-Douglas production function is specified, which incorporates four inputs, domestic capital (K), labor (L), foreign capital (F) and ICT capital:…”

“…Foreign Direct Investment is considered, among others, an important channel for technology diffusion, which in turn raises the host country's productivity growth. On the other hand, the new 'information economy' of the past decades is associated with increased diffusion of ICTs, which are expected to deliver higher productivity gains and enhanced growth (Dimelisa and Papaioannou, 2010).…”

“…In this paper, we intend to examine the FDI and ICT Effects on Productivity Growth: A Comparative Analysis of Developing and Developed Countries according to Dimelisa, and Papaioannou (2010) article.…”

Old Wine in a New Bottle: Trade Openness and Fdi Flows—are the Emerging Economies Converging?

“…The diffusion of technology may not be appropriate for the economy's factors of production and domestic firms may lose market share when facing severe competition from multinational companies. Econometric evidence indicates that the growth effect of FDI is positive and significant in a group of developed countries, but positive, though insignificant in the developing ones (Dimelis and Papaioannou 2010). Kottaridi and Stengos (2010) by applying nonparametric methodological approaches and, thus, taking into account nonlinear effects of initial income and human capital on economic growth, explore the FDI effect on growth.…”