Abstract
We study the interactions between information and communication technology (ICT) development and innovation in G-20 countries over 1961–2019. We establish whether there is temporal causality between these two variables. Employing the vector error correction modelling (VECM) framework, our findings render a grid of short-run and long-run causal relationships between ICT development and innovation, including long-run unidirectional causality from innovation to ICT development.
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Notes
It is weighted-average of all these individual innovation indicators.
It is weighted-average of all these individual ICT development indicators.
0 and 1/2 indicate absence and one/two co-integrating vector(s) between ICT development and innovation, respectively.
With the indication of SLH/DFH/FBH/NEH, representing supply-leading/demand-following/feedback/neutrality hypotheses between ICT development and innovation.
With the symptom of SLH/DFH/FBH/NEH.
With the likes of SLH/DFH/FBH/NEH.
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First author (RPP) has contributed to drafting, formulation, review of methods, illustrations, calculations, interpretation of data, conceptual layout of the paper, and editing. Second author (AKS) has done review of methods, conceptual layout of the paper, and editing. Third author (AS) has done review of methods, conceptual layout of the paper, and editing.
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Appendix A: Derivation of the composite indices of innovation activities and ICT development, using principal component analysis
Appendix A: Derivation of the composite indices of innovation activities and ICT development, using principal component analysis
The study forms two composite indices for innovation activities and ICT development, henceforth denoted by ‘CII’ and ‘CIC’. This is obtained through principal component analysis (PCA), by means of seven innovation indicators, namely, PAT, TAT, RDE, RDA, TRD, HTE, and STA, and five ICT development indicators, namely, TEL, MOB, INU, INS, and FIB, respectively. The detailed of these variables are listed and defined in the text (see Sect. 2). Three trees are used to have both CII and CIC: (1) organizing data in the identical order to generate an input matrix for the principal components; (2) engaging PCA, eigenvalues, factor loadings, and principal components are resulting; and (3) the principal components are recycled to construct CII and CIC for each country for every year. The comprehensive discussions of these steps to have these indices are available in papers such as Pradhan et al., (2020a, 2020b), and Nair et al. (2020). Tables A.1 and A.2 report the PCA results, while Figs. A.1 and A.2 present the variable loading plots for CII and CIC.
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Pradhan, R.P., Sarangi, A.K. & Sabat, A. The effect of ICT development on innovation: evidence from G-20 countries. Eurasian Econ Rev 12, 361–371 (2022). https://doi.org/10.1007/s40822-021-00189-y
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DOI: https://doi.org/10.1007/s40822-021-00189-y