ABSTRACT
Previous investigations into macroeconomic impact of investments in information and communication technology (ICT), while primarily focused on developed economies, have yielded some important insights. For example, it was determined that the “investments-to-revenues” model works well only if a threshold level of ICT capital infrastructure has been developed, that it is not the quantity but the quality of the full-time ICT workforce that plays an important role not only in converting a stream of investments in ICT into revenues, but also in achieving a spillover effect of investments that is captured by total factor productivity (TFP), the “something else” that contributes to macroeconomic output. In this study, we are concerned about the impact of human development, as measured by the Human Development Index (HDI), on macroeconomic outcomes and TFP. The subject of the study is a group of transition economies (TEs), a set of highly related economies that has a leaders group, which has some of the characteristics of developed economies, and a followers group, which has some of the characteristics of developing economies. Our results suggest that while for the leaders group, HDI has a statistically significant impact on gross domestic product (GDP), this relationship does not hold for the followers group. Similarly, our results suggest that while for the leaders group, HDI has a statistically significant impact on TFP, this relationship does not hold for the followers group.
