Investments in Telecoms and Growth in Productivity

The goal of this study is to investigate a link between investments in telecoms, a common subset of investments in information and communication technology and economic growth in the context of countries that are classified by the international community as transition economies. More specifically, in this study we focus on the relationship between telecoms and one of the determinants of economic growth, total factor productivity. Neoclassical growth accounting and the theory of complementarity provide the theoretical framework on which we build this research. By combining the data obtained from two sources, the World Bank Database and the IT Yearbook, we construct a 10-year data set for 18 economies spanning the period from 1993 to 2002. Our inquiry is structured as a seven-step process that utilizes six data analytic methods.