The Role of Information and Communication Technology and CO2 Emissions in Economic Growth: Empirical Evidence from Central and Eastern Europe

Abstract

This study aims to investigate the cointegration and causality relationship between economic growth, environmental pollution, information and communication technology and financial development in Central and Eastern European countries for the period 1996 to 2018. For this purpose, Banerjee and Carrion‐i‐Silvestre’s (2017) cointegration test and Emirmahmutoğlu and Köse’s (2011) causality test were used. In the empirical results obtained, there is a cointegration relationship between the variables. According to the causality analysis results, economic growth is the cause of information and communication technology growth, and of environmental pollution.. In addition, bidirectional causality was found between economic growth and financial development, and between environmental pollution and financial development. Information and communication technology has a significant impact on CO2 emissions and economic growth. From the results, it is recommended that investments in information and communication technology infrastructure be increased. The policy proposal is given in the conclusion part of the study.

JEL: C33, E44, O30