Innovation and Economic Development The Impact of Information and Communication Technologies in Latin America
The Impact of Information and Communication Technologies in Latin America
Edited by Mario Cimoli, André A. Hofman and Nanno Mulder
Chapter 8: ICT and Knowledge Complementarities: A Factor Analysis on Growth
8. ICT and knowledge complementarities: a factor analysis on growth Marco Capasso and Nelson Correa* INTRODUCTION 1 Many studies have tried to measure the impact of information and communication technologies (ICT) on economic growth. There are several ways to determine this impact: growth accounting exercises, panel data regressions, mathematical simulations and so forth. Most of them consider ICT as having a direct impact on growth. They assume that the simple accumulation of ICT goods leads to a direct positive impact on some income measure. This way of measuring is not precise, however, as it neglects the contribution to the knowledge base. ICT should not be considered a mere capital input, but rather both a capital good and an input to knowledge creation. In this paper, we focus on measuring the impact of ICT on economic growth only through their contribution to knowledge. Hence, instead of concentrating our attention on the accumulation of ICT goods, we assess the contribution of ICT use to the knowledge base and then the contribution of the knowledge base to economic growth. We thus study two important links to evaluate the impact of ICT use on economic growth. The first link acts between ICT and knowledge, while the second connects knowledge and GDP growth. After measuring both effects, we determine the part of the contribution of ICT to economic growth that operates through knowledge. While nobody today is discussing the importance of knowledge for economic growth, the mathematical formalization is still a point of conflict. In...
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