Producing or Playing? Investigating Internet Influence on Economic Growth

Abstract

This paper is focused on determining the effects of increase in the Internet usage on economic development of two groups of countries: OECD and NON-OECD countries. Two separate Vector Autoregression models were used. The hypotheses were inspired by claims that GDP per capita and trade, including trade in services, have a positive correlation with Internet usage growth. The hypotheses were tested on a set of 26 OECD and 21 NON-OECD countries for a period of 20 years, from 1995 to 2015. Results of the paper do not confirm the existence of a direct positive correlation between GDP per capita and Internet users. For all countries, a direct comparison of the chosen variables show a negative correlation. For OECD countries, trade in services has a positive correlation with Internet usage growth, while for NON-OECD countries both trade and trade in services showed a positive correlation with Internet usage growth. JEL Classification Numbers: O11, O33, O57; DOI: http://dx.