The Impact of Information and Communication Technology on Technological Innovation: The Mediating Roles of Financial Development and Human Development in Selected Developing Countries

Information and Communication Technology (ICT) has emerged as a cornerstone of economic and social progress in the 21st century, significantly influencing technological innovation. This study examines the direct and indirect effects of ICT on technological innovation (TI), with a focus on the mediating roles of financial development (FD) and human development (HDI) in 15 selected developing countries (China, India, Brazil, South Africa, Egypt, Nigeria, Indonesia, Malaysia, Iran, Argentina, Thailand, Kenya, Vietnam, Colombia, Pakistan) over the period 2000-2023. Using the panel autoregressive distributed lag (P-ARDL) model, both short and long-term relationships among variables are analyzed. Results indicate that ICT has a positive and statistically significant impact on TI (coefficient=0.39, p<0.01), with FD and HDI mediating 28% and 35% of this effect, respectively. Economic growth (GDPG) also positively influences TI. These findings contribute to endogenous growth theory by emphasizing the interplay of technology, finance, and human capital in fostering innovation. For policymakers in developing countries, the results advocate for integrated strategies that enhance ICT infrastructure, financial systems, and human capital to accelerate technological innovation. The study also provides practical recommendations, including investments in broadband, venture capital, and education, to support sustainable innovation-driven growth.