ICT Intermediates, Growth and Productivity SpilloversEvidence from Comparison of Growth Effects inGerman and US Manufacturing Sectors
AbstractRecent pre-crisis growth accounting exercises attribute strong productivity growth toincreased investments in information and communication technologies (ICT), especiallyduring the mid-1990s. EU-wide stylized facts about a growing US–EU productivity gapare confirmed for Germany, particularly showing no substantially economy-wide effectsfrom ICT for German sectors. Tracing the effect from ICT during the period 1991–2005,this study takes a different view by expanding the concept of value added to gross output,additionally including different types of intermediate inputs. The findings suggest thatimported intermediate inputs played a more dominating role in Germany than in the US,particularly imported non-ICT and ICT materials, although domestically-produced ICTmaterials were important as well. In the US, main driving forces were domesticallyproducednon-ICT services and ICT materials, even though imported ICT materialswere on the upraise post 1995. Moreover, there were decisive differences is countries’TFP growth rates with about twice the size in the US. According to robust econometricanalysis there have been strong spillover effects from increasing domestically-producedICT materials in German TFP growth, while for the US TFP growth originated fromincreasing imported ICT materials. It will be argued that these different productivityeffects stem from different functions of ICT in the production process. However, TFPgrowth differentials between Germany and the US during 1991 to 2000 are explained toa great extent by strong US TFP growth in the Electrical & Electronic Machinery sector.
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Bibliographic InfoPaper provided by Ifo Institute for Economic Research at the University of Munich in its series Ifo Working Paper Series with number ifo Working Paper No. 123.
Date of creation: 2012
Date of revision:
Industry productivity growth; information and communication technology; intermediate inputs; growth accounting; technology spillovers;
Find related papers by JEL classification:
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
- L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
- L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
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