Economic growth, development of telecommunications infrastructure, and financial development in Asia, 1991-2012

We use principal component analysis (PCA) to construct an index for the development of telecommunications infrastructure (DTI), and an index for financial development. We then assess the causal relationship among DTI, financial development, and economic growth in 21 Asian countries between 1991 and 2012. We study the Asian countries in four regional groups, and use a panel vector auto-regressive (VAR) model to detect the direction of causality among the three variables. Our results reveal that there is Granger-causality among the variables, both in the short run and in the long run, although the exact nature of the results varies by region in Asia. (C) 2015 The Board of Trustees of the University of Illinois. Published by Elsevier B.V. All rights reserved.