Does The Use Of Ict Affect Interest Rates In Transıtıon Economıes

Year 2018, Volume: 25 Issue: 2, 513 - 525, 14.08.2018

Seyfettin Ünal , Cüneyt Koyuncu

https://doi.org/10.18657/yonveek.452775

Abstract

This study
empirically analyzes the association between the level of ICT-use and interest
rates in transition economies. We hypothesized that an increase in ICT
penetration level lowers interest rates in an economy. In order to test this
hypothesis, we utilize four different proxies for ICT and two distinct
indicators for interest rate. The study conducts panel data analysis and uses
unbalanced data containing 24 years between 1990 and 2013. The size of samples
varies from model to model and the largest sample includes 402 observations of
22 transition economies. After taking into consideration other macroeconomic
determinants peculiar to interest rate, our primary finding reveals a strong
and statistically significant negative association between ICT-use level and
interest rate in these economies. This finding remains valid no matter which indicator is used for ICT penetration and interest rate in the models. Hence our results are robust.

Keywords

ICT, Interest rate, Panel data, Transition Economies

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