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What Explains the ICT Diffusion Gap Between the Major Industrialized Countries: An Empirical Analysis?

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  • Gilbert Cette
  • Jimmy Lopez

Abstract

Over the last few years, a large body of literature has shown that the level of information and communications technology (ICT) diffusion, and, as a result, the favorable effects of this diffusion on productivity, differ greatly between the major advanced countries, with the United States the country where ICT diffusion is strongest. This study aims to explain empirically this gap. Annual macroeconomic panel data are used for the period 1981-2005 and cover eleven OECD countries: Austria, Denmark, Finland, France, Germany, Italy, Japan, the Netherlands, Spain, the United Kingdom and the United States. The estimates obtained provide insight into the factors determining ICT diffusion and the gaps in this diffusion vis-à- vis the United-States. Compared to the United States, the lower ICT diffusion in the other major advanced countries can be explained by a smaller share of the population with a higher education and/or a higher level of rigidity in labour and product markets.

Suggested Citation

  • Gilbert Cette & Jimmy Lopez, 2008. "What Explains the ICT Diffusion Gap Between the Major Industrialized Countries: An Empirical Analysis?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 17, pages 28-39, Fall.
    • Handle: RePEc:sls:ipmsls:v:17:y:2008:3
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    File URL: http://www.csls.ca/ipm/17/IPM-17-cette.pdf
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    References listed on IDEAS

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    1. Aghion, Philippe & Askenazy, Philippe & Bourlès, Renaud & Cette, Gilbert & Dromel, Nicolas, 2009. "Education, market rigidities and growth," Economics Letters, Elsevier, vol. 102(1), pages 62-65, January.
    2. Gilbert Cette & Jimmy Lopez, 2009. "Comportement de demande de TIC : une comparaison internationale," Economie Internationale, CEPII research center, issue 119, pages 83-114.
    3. Antipa, P. & Cette, G. & Frey, L. & Lecat, R. & Vigna, O., 2008. "Recent trends in productivity: structural acceleration in the euro area and deceleration in the United States?," Quarterly selection of articles - Bulletin de la Banque de France, Banque de France, issue 11, pages 33-50, Spring.
    4. Bruno Amable & Donatella Gatti, 2006. "Labor and product market reforms: questioning policy complementarity," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 15(1), pages 101-122, February.
    5. Daniel Cohen & Marcelo Soto, 2007. "Growth and human capital: good data, good results," Journal of Economic Growth, Springer, vol. 12(1), pages 51-76, March.
    6. Gilbert Cette & Jacques Mairesse & Yusuf Kocoglu, 2002. "Croissance économique et diffusion des TIC : le cas de la France sur longue période (1980-2000)," Revue Française d'Économie, Programme National Persée, vol. 16(3), pages 155-192.
    7. Howitt, Peter & Aghion, Philippe, 2006. "Appropriate Growth Policy: A Unifying Framework," Scholarly Articles 4554121, Harvard University Department of Economics.
    8. Olivier Blanchard, 2006. "European unemployment: the evolution of facts and ideas [‘The macroeconomics of low inflation’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 21(45), pages 6-59.
    9. Koeniger, Winfried & Vindigni, Andrea, 2003. "Employment Protection and Product Market Regulation," IZA Discussion Papers 880, Institute of Labor Economics (IZA).
    10. Gilbert Cette & Jimmy Lopez & Pierre-Alexandre Noual, 2005. "Investment in ICTs: an empirical analysis," Applied Economics Letters, Taylor & Francis Journals, vol. 12(5), pages 309-312.
    11. Alessandra Colecchia & Paul Schreyer, 2001. "ICT Investment and Economic Growth in the 1990s: Is the United States a Unique Case? A Comparative Study of Nine OECD Countries," OECD Science, Technology and Industry Working Papers 2001/7, OECD Publishing.
    12. Gust, Christopher & Marquez, Jaime, 2004. "International comparisons of productivity growth: the role of information technology and regulatory practices," Labour Economics, Elsevier, vol. 11(1), pages 33-58, February.
    13. Philippe Aghion & Peter Howitt, 2006. "Joseph Schumpeter Lecture Appropriate Growth Policy: A Unifying Framework," Journal of the European Economic Association, MIT Press, vol. 4(2-3), pages 269-314, 04-05.
    14. Gilbert Cette & Pierre-Alexandre Noual, 2003. "L’investissement en TIC aux Etat-Unis et dans quelques pays européens," Working Papers 2003-03, CEPII research center.
    15. Gilbert Cette & Jimmy Lopez & Pierre-Alexandre Noual, 2004. "Le comportement de demande en capital TIC : une analyse empirique sur quelques grands pays industrialises," Economie Internationale, CEPII research center, issue 98, pages 59-82.
    16. Paul Conway & Giuseppe Nicoletti, 2006. "Product Market Regulation in the Non-Manufacturing Sectors of OECD Countries: Measurement and Highlights," OECD Economics Department Working Papers 530, OECD Publishing.
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    Citations

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    Cited by:

    1. Benjamin David, 2012. "Modélisation non-linéaire de l'impact des TIC sur la productivité du travail," Working Papers hal-04141025, HAL.
    2. repec:crs:ecosta:es419-420b is not listed on IDEAS
    3. Gilbert Cette & Yusuf Kocoglu & Jacques Mairesse, 2009. "Productivity Growth and Levels in France, Japan, the United Kingdom and the United States in the Twentieth Century," NBER Working Papers 15577, National Bureau of Economic Research, Inc.
    4. Nicholas Oulton, 2013. "Medium and Long Run Prospects for UK Growth in the Aftermath of the Financial Crisis," CEP Occasional Papers 37, Centre for Economic Performance, LSE.
    5. Oulton, Nicholas, 2012. "Long term implications of the ICT revolution: Applying the lessons of growth theory and growth accounting," Economic Modelling, Elsevier, vol. 29(5), pages 1722-1736.
    6. Philippe Aghion & Philippe Askenazy & Renaud Bourlès & Gilbert Cette & Nicolas Dromel, 2008. "Distance à la frontière technologique, rigidités de marché, éducation et croissance," Économie et Statistique, Programme National Persée, vol. 419(1), pages 11-30.
    7. Bilal Mehmood & Parvez Azim & Syed Hassan Raza & Huma Sohaib, 2014. "Labor Productivity, Demographic Traits and ICT A Demo-Tech Productivity Model for Asian Region," International Journal of Economics and Financial Issues, Econjournals, vol. 4(4), pages 773-783.
    8. Benjamin David, 2012. "Modélisation non-linéaire de l'impact des TIC sur la productivité du travail," EconomiX Working Papers 2012-51, University of Paris Nanterre, EconomiX.
    9. Bilal MEHMOOD & Parvez AZIM, 2013. "Does ICT Participate in Economic Convergence among Asian Countries: Evidence from Dynamic Panel Data Model," Informatica Economica, Academy of Economic Studies - Bucharest, Romania, vol. 17(2), pages 7-16.
    10. Gilbert Cette & Anne Epaulard & Pauline Givord, 2008. "Croissance de la productivité : le rôle des institutions et de la politique économique," Économie et Statistique, Programme National Persée, vol. 419(1), pages 3-10.
    11. Bilal Mehmood & Parvez Azim & Sofia Anwar, 2013. "Economic Convergence in Context of Knowledge Economies in Asia: Instrumental Variable Estimation," Oeconomics of Knowledge, Saphira Publishing House, vol. 5(1), pages 15-28, January.
    12. repec:eco:journ1:2014-03-08 is not listed on IDEAS

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    More about this item

    Keywords

    ICT; Investment; OECD; Education; Diffusion; Rigidity; Labour market; Product Market;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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