The Long-Run Relation among Financial Development, Technology and GDP: A Panel Cointegration Study Andrey Zagorchev a* , Youngsoo Bae b , Geraldo Vasconcellos c a Department of Economics, Lehigh University, 621 Taylor Street, Rauch Business Center, Bethlehem, PA 18015 b Department of Economics, University of Seoul, Seoul 130-743 Korea c Perella Department of Finance, Lehigh University, 621 Taylor Street, Rauch Business Center, Bethlehem, PA 18015 Abstract This paper examines the dynamic relationship among financial development, ICT, and GDP per capita in a panel cointegration framework using 86 sample countries. The long-run relationships are identified using panel unit root tests, cointegration analysis, and dynamic OLS. Our first finding is that personal computers and GDP increase the liquidity, size, and activity of financial systems. Second, the Internet and GDP improve the liquidity, size, stock trading, and activity of financial markets. Third, mobile phones and GDP stimulate liquidity, financial market size, and expansion of credit. The results suggest an equilibrium relation among financial development, ICT, and GDP. JEL classification: C23; G1; G15; O3; O16 Keywords: Financial Development, ICT, Economic Growth, Panel Cointegration This Draft: January 2010. Please do not quote nor cite without permission of the authors. *Corresponding author. Rauch Business Center, Lehigh University, Bethlehem, PA 18015, USA. E-mail address: agz205@lehigh.edu (A. Zagorchev); Tel.: +1-610-758-3420; Fax.: +1-610-758-4677 We would like to thank Anne-Marie Anderson, Shin-Yi Chou, Mary Beth Deily, Parveen Gupta, Stephen Snyder, Todd Watkins, and seminar participants at Lehigh University, the 2009 Academic Symposium at Lehigh University, and the 2010 Eastern Economics Association for their comments.