The Economic Growth Effect of Social Technology Improvement

Using data on 87 countries for 2004-2005, we explore the possibility that differences in social technology improvement have led to differentials in economic growth, as measured by GDP volumes. This study defines social technology as institutions, organizations, and operational capabilities that are required in pursuing any goal. Social technology includes six items in this study corporate governance, disclosure, ethics(in both public ethics and corporate ethics), business deregulation, effectiveness and integrity of the legal and judicial system, and economic freedom. The regression results run by WLS suggest that social technology improvement makes a substantial contribution to economic growth. More specifically, Korea has greater per capita real income responsiveness to social technology improvement than to physical development. The comparative study of country groups(OECD, NIEs, BRICs, OTHERS, Korea) indicates that per capita real income shows higher elasticity with respect to each of social technology variables in Korea than in the other countries with one exception(i.e.., OECD). These results imply that for Korea’s future growth, it is important to raise productivity through social technology improvement.(JEL: C3, G3, O5)