A developmental framework for ICT and labour productivity in the developing country: A case study of Thailand

The aim of this study is to verify the causal relationship between ICT and economic development in Thailand by providing a comprehensive framework based on economic theory and followed by sound quantitative analyses. The contribution of ICT to economic growth has been repeatedly discussed in the literature. Most studies in developed nations have concluded positive impacts of ICT on economic development (Cronin et al., 1991; Koutroumpis, 2009; Roller & Waverman, 2001). In addition, there are a number of related researches in developing countries that emphasised the ICT as a favourable driver for economic prosperity (Madden & Savage, 1998, 2000). Founded on the interest of aforementioned researches, this study tackles a further investigation on this issue by focusing on the relationship of ICT and improvement of labour productivity in a developing country. Thailand was selected as ground for investigation since for this country the relationship has not yet been examined by using a macroeconomic model. In other words, this study aims to provide a country study of Thailand with respect to the impact of ICT on the macroeconomic development. In terms of the formation of relevant variables, the quantitative proxy for ICT is presumably the value of communications extracted from value-added national output. Then such the value is disintegrated into two variables, namely value of communications consumption and investment. The value of labour productivity is measured in terms of output per employed worker. The following quantitative economic approaches are adopted. Firstly, it begins with a theoretical derivation of a Cobb-Douglas production function, which is a modification of the model of Khan & Santos (2002). Secondly, a framework is proposed in order to incorporate the two types of communications and labour productivity. The framework represents an interesting yet conjectural relationship of the two variables of communications and labour productivity. Finally, econometric analyses are conducted, providing robust results and endorsing the validity of the framework...