Did information and communication technology mediate the macroeconomic effect of the COVID-19 pandemic? Evidence from Indonesian districts

The role of Information and Communication Technology (ICT) in the economy continues to be a topic of discussion. Numerous works have addressed the topic, but no consensus has emerged. When the Coronavirus Disease 2019 (COVID-19) pandemic happened, this discussion entered a new phase, as the pandemic pushed many offline activities to go online. It is interesting to examine whether ICT can play a role in increasing economic resilience during a pandemic. The COVID-19 pandemic is relatively recent, and most previous studies have studied the impact of ICT on economic resilience during the pandemic using data at the country level. Then, using district-level data in Indonesia, this research aims to contribute to the existing knowledge. In addition, this study employs several proxies for ICT penetration (internet penetration, mobile phone penetration, and internet speed), which can enhance the role of this research in prior studies. Using a panel data regression, this analysis revealed that the COVID19 pandemic and the restriction policy negatively impact economic performance. Moreover, it was discovered that ICT could be disruptive to the economy. Nonetheless, districts with more advanced ICT have greater economic resilience in dealing with the COVID-19 pandemic. In addition, policymakers can use the findings of this study to consider policies or other methods to alleviate the economic disruption caused by ICT and encourage ICT to contribute more positively to the economy. Furthermore, the Government can concentrate on enhancing the districts that remain below the threshold regarding internet penetration, mobile phone penetration, and internet speed as development's priority areas.