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Theoretical and Applied Economics
No. 3 / 2018 (616), Autumn

Causal relationship between internet use and economic development for selected Central Asian economies

Fuat SEKMEN
Kyrgyzstan-Turkey Manas University, Bishkek, Kyrgzstan
Sakarya University, Sakarya, Turkey
Hasmet GOKIRMAK
Istanbul Sabahattin Zaim University, Istanbul, Turkey

Abstract. The aim of this study is to examine the effects of information and communications technology (ICT) on economic development of several Central Asian countries. Dumitrescu and Hurlin (DH) panel causality test has been used for the relationship between ICT and economic development. The DH test results indicate that a unidirectional causality exists from GDP per capital to Inter-net use. These results suggest that an increase in GDP per capita can stimulate internet use. In addition, the cross-sectional dependence is examined using LM test of Breusch and Pagan and CD-LM and CD test of Pesaran. The results suggest that the null-hypothesis, no crosssectional dependence exists among countries, is rejected for all the tests, suggesting an economic shock in a one country may have spillover effects on other countries.

Keywords: internet use; economic development; panel causality test; cross-section dependence.

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