The effects of telecommunication technology and leadership quality on private consumption in Malaysia

Abstract

We estimate the long‐run impacts of telecommunication technologies, information and communication technology (ICT), and national leadership on private consumption in Malaysia. To accomplish this objective, the research employs the unit root and cointegration tests on a quarterly sample from 1995:Q1 to 2020:Q4. Our results show that private consumption, ICT, leadership quality and other determinants are cointegrated. In the long‐run, we find that ICT and leadership quality both have a significance positive impact on private consumption. We also discovered that better ICT development and leadership quality will moderate the effects of disposable income on private consumption. Interestingly, the impact of ICT on private consumption is also found to be contingent upon the degree of leadership quality. Thus, policy initiatives aimed to improve ICT infrastructure and nurturing first‐class leadership talents should be prioritised in an effort to promote private consumption, which eventually leads to economic growth and development.