Abstract
This framework details the analysis of the role of technology on economic growth among BRICS nations, utilising annual panel data spanning from the year 2005 to 2020, the framework employs the fixed-effects and random-effects models, and where there is no evidence of fixed effects and random effects, particularly when investigating the components of technology, namely hardware, knowledge, and organization, the Pooled OLS is used.
The study found evidence of a non-linear association between technology and economic growth, a quadratic association to be precise (U-shape), this suggests that the negative effects of technology growth on economic growth diminish as the growth of technology increases. Thus, greater investment in technology leads to enhanced economic growth. Moreover, this means that there is a long-run association between technology and economic growth, where the initial increase in technology by 1 percent will lead to a 1.5 percent increase in economic growth within the context of the BRICS nations.
The examination further explored the influence of the four components of technology on economic growth within the BRICS bloc, and evidence of a non-linear association between hardware technology and past knowledge technology and economic growth is uncovered, in both instances on a respective basis. The initial dip, due to outdated hardware and knowledge technology on economic growth, will lead to a subsequent decrease of 0.17% and 1.75% on economic growth.
Organizational technology growth is statistically significant and positive within the linear association, and is most pronounced on economic growth, followed by hardware and knowledge technology, respectively. Contrary to the latter, product technology growth has an adverse impact on economic growth. However, there is no evidence of a non-linear association found between organizational technology and product technology and economic growth, respectively.
These results provide a vital insight for policymakers into the varying impact of technology and technology components on economic growth in BRICS countries, and therefore, calls for a tailor-made technological policy framework which is able to identify complexities between technology and economic growth, and further consider the decision-making environment.