The Role of Information and Communication Technology (ICT) on Economic Growth in Iran (Growth Accounting Approach)

Analysis of ICT impacts on the economic performance has been started since 1990s. Researches have found different results about ICT outcomes in different countries at macro level. The aim goal of this paper is to investigate the impact of ICT on Economic Growth (EG) by using Growth Accounting theory and Vector Error Correction Method (VECM) in Iran over the period 1959-2003 at different subperiods. Findings state that the non-ICT capital stock has the vital role (almost 50 percent) in EG. The employment share is 30-38 percent. Total Factor Productivity (TFP) accounts for 7-10 percent of EG. The production elasticity of ICT capital stock is 0.07. It contributes almost 7.0 percent of EG in the period of 1984-2003. This share doesnt consist of quality adjustment, usage, spillover, and technological effects, therefore it is the least. Also, there is a causal relationship from ICT capital stock on production in short and long run. In addition, the Scale of Return is unit in Iran economy. Improvement of the complementary factors and ICT infrastructure and Promoting the usage of ICT can increase the contribution of ICT in Iran economy.