Telecommunications Infrastructure and Economic Growth in OECD Countries: Cross-Sectionally Dependent Heterogeneous Panel Causality Analysis

AYTUN C. , Akin C. S.

IKTISAT ISLETME VE FINANS, vol.29, no.340, pp.69-93, 2014 (Journal Indexed in SSCI) identifier

  • Publication Type: Article / Article
  • Volume: 29 Issue: 340
  • Publication Date: 2014
  • Doi Number: 10.3848/iif.2014.340.4123
  • Title of Journal : IKTISAT ISLETME VE FINANS
  • Page Numbers: pp.69-93


The aim of this study is to determine the direction of causality between the telecommunication infrastructure and economic growth in OECD countries. The empirical model is estimated for the panel of 21 OECD countries during the period 1975-2012. Apart from the previous studies, this study utilizes the advanced panel causality approach, which allows both cross-sectional dependency and heterogeneity across countries. The findings show that there is bi-directional causality between telecommunications infrastructure and economic growth. In addition to the casual relationship between telecommunications infrastructure and economic growth, this situation also gives way to the feedback effect. Thus, with the interactive impact of the economic growth on telecommunications infrastructure, policies will be much more effective. This seems to suggest that policies aimed at stimulating the OECD economies by accelerating investment in the telecommunications sector may be successful.