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ICT accumulation and productivity growth in the United States: an analysis based on industry data

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  • Paola Caselli

    ()
    (Bank of Italy, Economic Research Department)

  • Francesco Paternò

    ()
    (Bank of Italy, Economic Research Department)

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    Abstract

    The paper analyses labour productivity and total factor productivity (TFP) dynamics in the United States using new data at the industry level on information and communications technology (ICT) catapital stock in both manufacturing and the services sector. In manufacturing, a growth accounting exercise confirms that the contribution to labour productivity of ICT accumulation has been higher in the second half of the nineties than in 1973-95. TFP has also been accelerating, even controlling for cyclical output fluctuations, especially in ICT intensive industries. We have also found evidence of a recent direct effect on TFP growth of ICT intensity, though only in ICT intensive industries. In the services sector a direct effect of ICT accumulation on the acceleration of labour productivity could be detected through both a growth accounting exercise and estimating a value added function. Moreover, we also have found evidence of a significant TFP acceleration after 1996, even controlling for cyclical effects. Econometric evidence supporting a positive effect of ICT accumulation on TFP growth is still rather weak, though some signs have emerged that computers accumulation has positively affected TFP dynamics in recent years.

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    File URL: http://www.bancaditalia.it/pubblicazioni/econo/temidi/td01/td419_01/td419/tema_419_01.pdf
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    Bibliographic Info

    Paper provided by Bank of Italy, Economic Research and International Relations Area in its series Temi di discussione (Economic working papers) with number 419.

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    Date of creation: Oct 2001
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    Handle: RePEc:bdi:wptemi:td_419_01

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    Web page: http://www.bancaditalia.it
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    Related research

    Keywords: ICT; growth accounting;

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    References

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    1. Z, Griliches & Jacques Mairesse, 1997. "Production Functions : The Search for Identification," Working Papers 97-30, Centre de Recherche en Economie et Statistique.
    2. William D. Nordhaus, 2000. "Alternative Methods for Measuring Productivity Growth," Cowles Foundation Discussion Papers 1282, Cowles Foundation for Research in Economics, Yale University.
    3. Patrizio Pagano & Fabiano Schivardi, 2001. "Firm Size Distribution and Growth," Temi di discussione (Economic working papers) 394, Bank of Italy, Economic Research and International Relations Area.
    4. 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 2000-20, Board of Governors of the Federal Reserve System (U.S.).
    5. Stephen D. Oliner & Daniel E. Sichel, 1994. "Computers and Output Growth Revisited: How Big Is the Puzzle?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(2), pages 273-334.
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    Cited by:
    1. Matteo Bugamelli & Patrizio Pagano, 2004. "Barriers to investment in ICT," Applied Economics, Taylor & Francis Journals, vol. 36(20), pages 2275-2286.
    2. Desmet, Klaus & Rossi-Hansberg, Esteban, 2007. "Spatial Growth and Industry Age," CEPR Discussion Papers 6421, C.E.P.R. Discussion Papers.
    3. Bugamelli, M. & Pagano, P. & Paterno, F. & Pozzolo, A.F. & Rossi, S. & Schivardi, F., 2003. "Ingredients for The New Economy: How Much Does Finance Matter?," EIFC - Technology and Finance Working Papers 31, United Nations University, Institute for New Technologies.

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