The Asymmetric Impact of Financial Expansion, ICT Development, and Trade Openness on China’s Economic Growth

This study scrutinizes the impact of financial development, information and communication technology (ICT), labor force, and trade openness on China's economic growth from 1990 to 2021. To this end, several econometric tests, including stationarity tests, cointegration tests, and the long-run and short-run nonlinear tests, are employed to estimate the consistent and robust findings. The results of nonlinear autoregressive distributive lag (NARDL) approach discover the positive shocks in financial and ICT development. Meanwhile, trade openness significantly boost economic development both in the short and long-run, which validates the trade-led growth hypothesis in China. Moreover, a negative shock in financial expansion obstructs economic growth. Conversely, adverse shocks in ICT development increase economic growth significantly. In addition, the labor force significantly reduces the pace of economic growth in the long-run. Finally, the short-run coefficient signs are similar to the long-run coefficient signs but differ in magnitude and significance level. An important implication of these results is that the development of financial and ICT sectors and trade openness should be encouraged.