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The contribution of ICT to economic activity: a growth accounting exercise with Spanish firm-level data


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  • Ignacio Hernando

    (Banco de España)

  • Soledad Núñez

    (Banco de España)

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    This paper uses a well-established growth accounting framework to measure the contribution of ICT goods (considered as capital inputs) to output and labour productivity growth in the Spanish economy. We apply this framework to a sample of around 1300 Spanish firms per year over the period 1991-2000. The use of micro-level data is especially useful for the purpose in hand. Firstly, our database provides detailed breakdowns of capital. This helps mitigate the usual mismeasurement problems in obtaining capital stocks. Secondly, by avoiding the usual availability lags associated with the use of aggregate data, we can focus on a more recent period. The main findings may be summarised as follows. 1) The use of ICT as a capital input has made a positive and, relative to its cost share, significant contribution to output and productivity growth. 2) This contribution was higher in the second half of the 1990s. For this period, we estimate that the use of ICT inputs accounted for nearly one-fourth of labour productivity growth. 3) At a sectoral level, we find that there is a general rise in the share of ICT in total capital and a general reduction in ICT cost shares, driven by the sharp downward trend in the prices of ICT products. However, the contribution of ICT inputs displays a degree of heterogeneity across sectors, owing to the disparity of sectoral accumulation rates of ICT inputs. Finally, results at the firm level exhibit a notable heterogeneity, although a majority of firms have experienced an increase in the ICT capital growth rates and in the ICT contribution to growth.

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    Bibliographic Info

    Paper provided by Banco de Espa�a in its series Banco de Espa�a Working Papers with number 0203.

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    Length: 37 pages
    Date of creation: Jan 2002
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    Handle: RePEc:bde:wpaper:0203

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    Related research

    Keywords: Information and Communication Technologies; Growth Accounting; Technological Change;

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    1. Erik Brynjolfsson & Lorin M. Hitt, 2003. "Computing Productivity: Firm-Level Evidence," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 793-808, November.
    2. Brynjolfsson, Erik. & Hitt, Lorin M., 1995. "Paradox lost? : firm-level evidence on the returns to information systems spending," Working papers, Massachusetts Institute of Technology (MIT), Sloan School of Management 3786-95., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    3. Dale W. Jorgenson & Kevin J. Stiroh, 2000. "Raising the Speed Limit: U.S. Economic Growth in the Information Age," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 31(1), pages 125-236.
    4. 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.
    5. Paul Schreyer, 2000. "The Contribution of Information and Communication Technology to Output Growth: A Study of the G7 Countries," OECD Science, Technology and Industry Working Papers 2000/2, OECD Publishing.
    6. Stephen D. Oliner & Daniel E. Sichel, 2000. "The resurgence of growth in the late 1990s: is information technology the story?," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 2000-20, Board of Governors of the Federal Reserve System (U.S.).
    7. Robert H. McGuckin, 2002. "Computers and Productivity: are Aggregation Effects Important?," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 40(1), pages 42-59, January.
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    Cited by:
    1. Samoilenko, Sergey & Osei-Bryson, Kweku-Muata, 2008. "An exploration of the effects of the interaction between ICT and labor force on economic growth in transition economies," International Journal of Production Economics, Elsevier, Elsevier, vol. 115(2), pages 471-481, October.
    2. Ignacio Hernando & Soledad Núñez, 2004. "The contribution of ICT to economic activity: a growth accounting exercise with Spanish firm-level data," Investigaciones Economicas, Fundación SEPI, Fundación SEPI, vol. 28(2), pages 315-348, May.


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