Investigating the Reaction of Economic Complexity to Information and Communication Technology Shocks in Iran(Using the Vector auto Regressive Model)
Subject Areas : Intelligent Multimedia Processing and Communication Systems (IMPCS)
Ashkan
Rahimzadeh
1
(Academic staff of Islamic Azad University of Zanjan)
Keywords: information and communication technology, economic complexity, vector auto regressive model,
Abstract :
Introduction With the characteristics of knowledge, information and communication technology creates spillover effects in production and causes economic complexity. This technology has advantages such as reducing costs, overcoming geographical boundaries, increasing the flow of information, ensuring transactions due to quick access to information and increasing competitiveness. Method The statistical data used in this research is from the World Bank and the MIT University website during the years 2000-2020, and Eviews software was used to estimate the proposed model. In this research, the vector auto regressive model is used, and according to the Schwartz Bayesian criterion, the optimal interval is determined. To perform the cointegration test, Johansen's cointegration test is used. In the inference related to a vector auto regressive model, attention is paid to shock response functions and variance decomposition. A shock response separates the components of the endogenous variables into shocks with mutations to specific variables. We examine the impact of this shock over a 10-year plan. Results The time series data of this study are all stationary and based on the Schwartz-Bayesian criterion, the optimal interval is one. The results of the Johansen test indicate the existence of a long-term relationship between the research variables and the estimate shows the positive impact of Internet users and the import of ICT goods on economic complexity in the long term. The F statistic in the estimation of the research model based on vector auto regressive is significant and 87% of the economic complexity changes are explained by the model variables. The impact of the ICT product import shock on economic complexity is positive in all years and this impact is positive for Internet users in all years except the second to third year. Also, the effect of variance analysis of economic complexity shows that the import of ICT goods and Internet users has a positive role in explaining the changes of economic complexity and the share of import of the desired goods is higher. Discussion This research states that if the economy can transfer a large amount of knowledge and skills to Internet users in the form of large networks of people, and also the necessary platforms are provided through ICT products, which are important in this field, a diverse set of Knowledge goods are produced and a more complex economy is obtained.
