Global, International and Cultural Issues in IS


The limited resources of Transition Economies (TE) accentuate the need for formulation of the effective and efficient policiesfor investments in Information and Communication Technologies (ICT). However, the empirical evidence required for sounddecision making is scarce, thus prompting a call for additional studies in the area of the macroeconomic impact ofinvestments in ICT. Using time series data for the period from 1993 to 2002, we investigate the impact of investments inTelecoms on Total Factor Productivity (TFP) in the context of 18 TEs of Central Europe. The results of the data analysissuggest that while all TEs exhibited overall growth in productivity, the annual growth of the majority was inconsistent andnot determined by the increase in the levels of investments and full-time Telecom labor. The results also indicate thatintroduced for the purposes of the investigation composite proxy variable Change in Productivity may reliably serve as apredictor of TFP for eight out of eighteen TEs, thus indicating actionable paths for TEs to obtain a spillover effect frominvestments in ICT.