The effects of ICT⁎ on output per worker: A study of the Chinese economy

• The contribution of five indicators of ICT on economic growth of China is explored.
• Results show evidence of long-run association among all ICT indicators and growth.
• ICT indicators elasticity coefficient range from 0.01 to 0.08.
• Bidirectional causality between mobile cellular, telecommunication and economic growth is noted.
• Mobile cellular and telecommunications technology are identified as leading drivers of growth.

In this paper, we explore the short-run and long-run contribution of five indicators of information and communication technology (ICT⁎) on economic growth of China over the sample period 1980–2013. We use the augmented Solow (1956) framework, the ARDL bounds (Pesaran, Shin, & Smith, 2001) approach to cointegration and the Toda and Yamamoto (1995) granger non-causality tests to examine the possible linkages. The results show evidence of long-run association among level variables for all the indicators of ICT⁎. From the results, we also note that all the indicators of ICT⁎ have a positive and statistically significant elasticity coefficient ranging from 0.010 to 0.080. From the Granger causality results, we note bidirectional causality between mobile cellular, telecommunication and economic growth; and between mobile cellular, telecommunication and capital per worker, respectively. Other results indicate that fixed broadband cause capital accumulation; capital accumulation causes internet technology. We also note bidirectional causality between mobile cellular and telecommunication, and between fixed broadband and internet, respectively; and a unidirectional causality from internet and fixed broadband to hi-tech exports; and from mobile cellular and telecommunication to fixed broadband, respectively. From the overall results, within caveats, we highlight that while all the indicators of ICT⁎ are imperative for long-run growth, besides capital per worker, the dominant technology drivers are mobile cellular and telecommunications technology.