Internet usage, economic growth and financial development in Australia

Salahuddin, Mohammad and Alam, Khorshed (2014) Internet usage, economic growth and financial development in Australia. In: 2014 Econometric Society of Australasian Meeting (ESAM) and Australian Conference of Economists (ACE) , 1-4 July 2014, Hobart, Tasmania.


This study explores the short- and the long-run effects of the Internet usage, financial development and trade openness on economic growth in Australia using annual data for the period 1985-2012. ARDL bounds test for cointegration and Granger causality test for causal link are applied. Results indicate that the Internet usage and financial development spur economic growth in the long-run. Trade openness has positive but insignificant long-run effect on growth. However, the short-run growth effects of all these variables are insignificant. Dynamic OLS estimation confirms the robustness of the long-run findings. The Granger causality test reveals that both the Internet usage and financial development Granger-cause economic growth in Australia. The Internet usage also Granger causes financial development. The robustness of the causality link was checked by Innovation Accounting Approach (IAA). The findings are supportive of the claim that the Internet is transforming Australian economy at a rapid pace. As such, the current implementation of the National Broadband Network is expected to lead to an increase in the Internet usage and further boost its growth and productivity impacts on the Australian economy.

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Item Type: Conference or Workshop Item (Commonwealth Reporting Category E) (Paper)
Refereed: Yes
Item Status: Live Archive
Faculty/School / Institute/Centre: Current - Faculty of Business, Education, Law and Arts - School of Commerce
Date Deposited: 23 Jan 2015 06:12
Last Modified: 15 Feb 2017 04:27
Uncontrolled Keywords: Australia, economic growth, financial development, granger causality, internet usage, trade openness
Fields of Research : 14 Economics > 1402 Applied Economics > 140202 Economic Development and Growth
15 Commerce, Management, Tourism and Services > 1503 Business and Management > 150302 Business Information Systems

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