Technological Spillovers and TFP: The Role of Information Communication Technology

Abstract

Objective: This research examines the impact of technological spillover on TFP through ICT for developed and emerging countries (OECD & BRICS).

Research Gap: Technology innovated in advanced countries spillover to emerging countries mainly through two classic avenues, including trade (bilateral imports), and foreign direct investment. Technological spillovers can take place through ICT or digitalization. This area has scarcely touched by the researchers. One of the unique features of this channel is that it is least affected by barriers and boundaries.

Design/Methodology/Approach: System GMM technique designed for panel data dynamic set    (Arellano & Boverb, 1995; Blundell & Bond, 1998) for 1996-2022. The key benefit regarding this method is that no external instrument is required instead it uses internal instruments to reduce the endogeneity among regressors.

The Main Findings: Our empirical findings support to previous research and theoretical concerns, of ICT positively incentivize growth in nations included in our analyses. Second, while these factors are substitutable and have spillover effects, the conditional impact of ICT is also positive.

Theoretical / Practical Implications of the Findings: International R&D Spillover Theory of  (Coe & Helpman, 1993) empirical study based on several recent research on innovation and TFP. Because underlying model of spillover theory extensively studied.

Originality/Value: This study contributes to the literature by offering a multi country econometric analysis of OECD & BRICS, addressing ICT as a carrier of knowledge spillover and positively impact TFP, and recommending policy interventions for sustainable growth.