ROLE OF KNOWLEDGE ECONOMY USING INFORMATION TECHNOLOGY AND ITS POTENTIAL IMPACT ON ACHIEVING ECONOMIC GROWTH IN MALAYSIA

Abstract

Information technology is a fundamental pillar of the knowledge economy because of its importance in influencing the overall economy and subsequently affecting aggregate demand, as well as being one of the governments means to generate job opportunities, reduce unemployment, and thus stimulate growth for the country's overall economy. From this standpoint, the research aims to demonstrate the impact of the knowledge economy on the Malaysian economic growth during the research period, and then measure and analyze the knowledge economy and its impact on the Malaysian economic growth, using advanced standard methods such as autoregressive distributed lag (ARDL) to investigate the association among variables. As the research found that some variables are static at the level and others are static at the first difference, according to the unit root test, which means rejecting the null hypothesis due to the lack of direction in analyzing the data, and the model does not suffer from the problem of self-correlation and the problem of variance. And the existence of a long-term relationship between the variables. The results also exposed a positive nexus between information technology and the economic growth of the country. This study guides the policymakers regarding developing policies related to the information technology used for economic development.