Total Factor Productivity, Demographic Traits and ICT: Empirical Analysis for Asia

This paper advances a model to explain the total factor productivity in Asian countries, most of which are labor surplus and are endowed with substantial human capital. Such promising demographic potentials are considered as complementary factors to use of Information and Communication Technology (ICT). Population with such favorable demographic traits and access to ICT results in higher Total factor productivity (TFP). We call this as Demo-Tech-TFP Model and is tested by using data for 2000-2010 of 24 Asian countries. Econometric concerns like presence of endogenous and/or predetermined covariates and small time-series and cross-sectional dimensions of panel dataset are tackled by using System Generalized Method of Moments (SYS-GMM). Results show considerable support for the Demo-Tech-TFP hypothesis. Need is to design such models that suit the local demography and patterns of technological diffusion currently taking place in developing countries.