Relationship between ICT penetration rate and socio-economic variables in the Asian countries: a dynamic panel data approach

Report, 2012

Despite the slow socio-economic development (namely health and education), the ICT sectors have grown remarkably in Asian region thanks to a massive penetration rate of ICT devices (particularly cellular and internet) in the last couple of decades. This phenomenon raises the question on how much have ICT development contributed to the society. Addressing this issue, the study aims at relating two variables of socio-economic indicators included in the calculation of the Human Development Index (HDI): educational attainment and health, whereas the variables of the Internet subscriber and telephony are representing the development of ICT sectors. The study covers roughly 35 selected Asian countries that represent all the sub-regions in Asia based on the World Bank and International Telecommunication Union (ITU)’s database, and the figures range in time from 1983 to 2005. The study first identifies the unit root test and then builds cointegration between the non-stationer series. As there are many gaps in the data, the Maddala-Wu (1999) estimation is implemented while the Westerlund (2007) cointegration test is applied to further examine the long run trend. The results are quite surprising in that ICT sectors represented by internet and telephony have no statistical evidence of cointegration with socioeconomic variables.