FDI, ICT and Economic Growth in Developing Countries: An Empirical Analysis
The study empirically investigates the dynamic influences of inflows of foreign direct investment (FDI) and base of information and communication technology (ICT) on economic growth in selected developing countries. In economic sense, FDI is identified as
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FDI, ICT and Economic Growth in Developing Countries: An Empirical Analysis Madhabendra Sinha, Rishab Das, and Partha Pratim Sengupta
10.1 Introduction Inflows of foreign direct investment (FDI) are well recognized as one of the efficient channels for transferring the advanced technologies and fostering economic growth in developing nations. A group of some mainstream economists under the school of New Theory of Economic Growth considers FDI inflow as a driver of the engine of growth of the economy. They think that inflows of FDI affect not only the per capita economic output but also the rate of economic growth. Bringing this background into the current phase of globalization, it would be observed that advancement of technology through the means of FDI inflows having a vital role in the economic growth process is deeply fuelled by the promotion of information and communication technology (ICT) particularly in developing countries. It is a fact that during last three decades, globalization has performed with its high-speed engine particularly in developing world as reflected in terms of chunk amount of FDI flows, volume of trade, etc., and ICT has also entered into the process with its long and wide wings as a complementary matter. However, with the versatile views several studies document manly two kinds of empirical outcomes; firstly, the huge amount of FDI inflows is nothing but a results of a parallel upgradation of ICT base in developing nations, and another side says that the observed development of ICT in developing M. Sinha (B) · P. P. Sengupta Department of Humanities and Social Sciences, National Institute of Technology Durgapur, Durgapur, West Bengal 713209, India e-mail: [email protected] P. P. Sengupta e-mail: [email protected] R. Das Department of Computer Science and Engineering, National Institute of Technology Durgapur, Durgapur, West Bengal 713209, India e-mail: [email protected] © Springer Nature Singapore Pte Ltd. 2020 S. Sikdar et al. (eds.), Role of IT- ITES in Economic Development of Asia, https://doi.org/10.1007/978-981-15-4206-0_10
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economies is a complementary results of a big size of FDI inflows from developed world. So, in order to find out the dynamic impacts of FDI on economic growth the present scenario should incorporate ICT as one of the most important drivers of digitalization in developing countries. The improvement of ICT has made the globalization as a truth mainly in developing economies. Moreover, ICT enables the respective nations to extract their potentiality in economic sphere in terms of the expansion in productivity and competitiveness, and it can also augment the economic efficiency through spreading the flow of relevant information across various sectors, communities, producers, consumers as well as policy planners within and between nations. Through the channel of growing global linkages ICT directly affects FDI inflows significantly, and it also might be considered as a determinant of FDI inflows1 and eco
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