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

Abstract

This paper studies the causality relationship between Foreign Direct Investment and Information and Communication Technologies based on panel data covering Middle East countries during the period 1990-2010. The empirical results support of a short-run cointegration relationship after allowing for the heterogeneous country effect. The long-run relationship is estimated using a full-modified OLS. Pedroni's heterogeneous panel cointegration test reveals have long-run equilibrium relationship between FDI and economic growth. The analysis of results indicate that the growth contribution of ICT and FDI was quite low for these countries. The econometric results showed a positive and significant impact of ICT and FDI in these countries.