The spillover effects of investments in telecoms: insights from transition economies

For several years, researchers and practitioners have been concerned about the impact of investments in information and communication technologies (ICTs) on productivity. The research framework of neoclassical growth accounting is widely used in this area of research on information technology and productivity. While several studies have explored the relationship between investments in ICT and metrics such as GDP, the links between investments in ICT and total factor productivity (TFP) have received less attention, particularly for transition economies (TEs). While the data that we use in this study are directly related to TEs, our exploration can provide insights that are useful for understanding similarities and differences between developed and developing/emerging economies. In this study, we propose and illustrate a methodology for investigating the relationship between investments in ICT and TFP that is consistent with the framework of neoclassical growth accounting.