Section 5 discusses the empirical results and Section 6 provides the policy implications of the empirical results and concluding remarks. Section 4 provides the methodology used in this study, outlining the conceptual model, hypotheses and empirical methodology. Section 2 provides a theoretical basis, Section 3 offers a brief review of the literature.

The results from the empirical analysis will have important policy implications pertaining to ICT penetration, financial sector development and pro-growth strategies. Hence, the primary objective of this paper is to examine the causal relationships between ICT penetration, financial sector development and economic growth using a panel vector auto-regressive (VAR) model for the Next-11 countries from 1961 to 2012. While the relationship between ICT on economic development has been well established, the literature that examines the dynamics between ICT penetration, financial sector development and economic growth is not well-developed. Additionally, the role of financial sector development has been extensively studied in the literature (see for example, King and Levine, 1993 Levine and Zervos, 1996 Levine et al., 2000 Ulgen, 2015). Several studies have examined the impact of network externalities on economic growth and vice versa (see, for instance, Pradhan et al., 2014a). ICT is regarded as a foundational condition for a knowledge-intensive economy, where the following can be achieved: (1) strengthening of collaboration between economic agents, thereby enabling firms to pursue open innovation ( Fitjar and Rodríguez-Pose, 2013) (2) enhancing the innovative capacity of countries ( Nair, 2011 Nair and Shariffadeen, 2009) (3) improving firm level productivity ( Sadun and Farooqui, 2006 Forman et al., 2005 Entner, 2008) (4) providing easy access to a wide range of affordable products and services ( Brown and Goolsbee, 2002 Baye et al., 2004 Tang et al., 2007) (5) opening new employment opportunities ( Nair and Vaithilingam, 2012) (6) improving corporate and public sector governance ( Kalam, 2003) and (7) providing marginalized communities access to information and resources for business development ( Bhatnagar, 2000 Quibria et al., 2002).

ICT has become an integral part of the global economic architecture. Over the past five decades, there has been rapid transformation of the global economy and many of the changes have been powered by the information and communication technology (ICT) revolution.

System shock 2 nexus