Information and Communication Technology and National Competitiveness: A Cross-country Analysis

Information and Communication Technology is a main factor that increases competitive capacity of countries and it improves their position in international exchanges. In this paper the effect of Information and Communication Technology ion national competitiveness with using panel data regression during 2008-2016. To estimate the model, countries divided into four groups include “factor-driven countries”, “efficiency-driven countries”, “innovation-driven economies” and “transition” countries as some countries are transitioning from stage one to two, and others are moving from stage two to three. The specified econometric model also estimated for whole sample includes 80 countries. Findings indicate that the Information and Communication Technology improvement has positive and statistically significant effect on the countries' level of competitiveness in four group countries. The elasticity of competitiveness with respect to Information and Communication Technology for factor-driven economies is between 0.02-0.07, in efficiency-driven countries 0.1, in innovation-driven countries between 0.06-0.15. Finally the elasticity of competitiveness in transition countries one to two and two to three is about 0.01 and 0.08 respectively. This elasticity for whole sample is 0.05. The conclusion of this paper is that the developed countries have appropriate technological readiness and adoption of Information and Communication Technology has a high impact on productivity and competitiveness.