Does Telecommunications Investment Cause Economic Growth: Evidence from Korea

This paper examines the causality issue between telecommunications investment and economic growth for South Korea by applying recently developed time series techniques. Tests for unit roots, co-integration, and Granger causality are presented. The results show that hi-directional causality runs from telecommunications investment to economic growth for South Korea. This means that increased telecommunications investment directly affects economic growth and an increase in real income also influences telecommunications investment. The study also discusses the implications of the results for addressing telecommunications policy in South Korea.