The Impact of Information and Communication Technology on the Value Added of Manufacturing Sector: Comparing Asian Countries by Income Group Levels

Abstract

Information and Communication Technology (ICT) is extremely necessary for the majority
aspects of our lives. ICT, as well, plays a significant role in the manufacturing industries. It
forms the idea for many advances in all aspects in modern times as well as manufacturing
technologies. It is considered to be a key strategy for countries to elevate the value added, no
exception in Asian countries. Nowadays, Asia has become the world’s manufacturing hub.
However, Asian countries are all at different levels of the economy. Analyzing each level will
allow us to examine specific patterns of ICT diffusion in the manufacturing sector. Thus, this
study aims to analyze the impact of ICT on Manufacturing Value Added (MVA) in Asian
countries by the type of income group levels, namely: lower-middle, upper-middle, and highincome countries. This study uses data from 35 Asian countries from 2010 until 2018. By
applying robust panel data analysis, this study provides commendable evidence that ICT
significantly contribute to the increase of value added of the manufacturing sector in Asian
countries, with different impacts for different types of group levels. The study supports the policy
recommendation that the government should increase attention in the diffusion of ICT to fasten
and boost value added of the manufacturing sector