Information and Communication Technology, Energy Volatility and Output Volatility Nexus A Global Panel Data Analysis

Abstract

The basic purpose of this research is to ensure a greater understanding of information communication technologies and energy volatility consumption on the output volatility. There is a paucity of research that focused on the association among energy volatility consumption and information communications technologies. But there is no study which connects the effects of information technology communications on the output volatility as well as the effect of energy volatility on the output volatility. To fulfill this gap, we used different econometric techniques like pooled OLS, fixed effect, random effect estimation, two stage least square and generalized method of moments in our empirical analysis. The current investigation also applies endogeneity in the panel estimation. Moreover, to ensure that the study’s findings were stable, we ran a series of robustness assessment also. The panel of global analysis is used for 154 nations for the span of 50 years, from 1971 to 2020. ICT is measured by fixed telephone subscription, mobile cellular subscription and individuals using the internet whereas energy volatility consumption is measured through the rolling window of 3-years moving average of standard deviation. Similarly, output volatility is also constructed through the 3-years moving average of standard deviation. The findings reveal that energy consumption volatility yields considerable results and has a distorted impact on output volatility whereas information communications technologies suggested the negative impact on the output volatility as it mitigate the economic instability and the output volatility. The findings for all of the nations covered in this empirical investigation are consistent in general. This study provides important policy recommendations for implementing ICT-enabled technologies, which will result in more inventive advances and growing financial economic growth. It is advised that the government should promote ICT technologies which results in the higher productivity in the economy and protracted development.