An exploration of the effects of the interaction between ICT and labor force on economic growth in transition economies

Complementary investments serve as one of the prerequisites for the successful translation of investments in Information and Communication Technologies (ICT) into macroeconomic outcomes. In this study, we investigate the presence of complementarity between investments in Telecoms and full-time Telecom staff in the context of transition economies (TE). Using translog formulation of Cobb-Douglas production function, we determined the presence of statistically significant interaction effect between the two variables. The direction of the effect, however, varies between the two subgroups of TEs in our sample, thus suggesting the presence of the level-dependent threshold.