Title: Questing the two key growth determinants: financial depth and information communication technology depth in Asian countries

Authors: Rudra P. Pradhan; John H. Hall; Yasuyuki Nishigaki

Addresses: Vinod Gupta School of Management, Indian Institute of Technology Kharagpur, West Bengal 721302, India ' Department of Financial Management, University of Pretoria, Pretoria, South Africa ' Department of Economics, Ryukoku University, Kyoto 6128577, Japan

Abstract: This paper examines the long-term relationship between financial depth, information communication technology (ICT) depth and economic growth in the selected Asian countries for the period from 2001 to 2012. Using principal component analysis to construct depth indices and a panel vector auto-regressive (VAR) model to test Granger causalities, the study identifies the presence of bidirectional causality between financial depth and economic growth. These variables predict (and are predicted by) a country's level of ICT depth. The policy implication of this study is that, in order to maintain sustainable economic growth in the selected Asian countries, governments should, whilst recognising differences in the financial depth, ICT depth and economic growth of a given country, actively promote and even legislate policies that stimulate financial depth and ICT depth.

Keywords: financial depth; ICT depth; economic growth; principal component analysis; PCA; panel VAR; Granger causality; Asia; information and communications technology; information technology.

DOI: 10.1504/IJTPM.2015.071035

International Journal of Technology, Policy and Management, 2015 Vol.15 No.3, pp.248 - 276

Received: 18 Dec 2014
Accepted: 23 Feb 2015

Published online: 07 Aug 2015 *

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