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ICT and Productivity in Europe and the United States: Where Do the Differences Come From?

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Author Info

  • Bart van Ark

    ()
    (University of Groningen and The Conference Board)

  • Robert Inklaar

    ()
    (University of Groningen and The Conference Board)

  • Robert H. McGuckin

    (The Conference Board)

Abstract

In this paper we analyse labour productivity growth in 51 industries in European countries and the United States. Using shift-share techniques we identify the industries in which the U.S. is leading most strongly. With a detailed decomposition analysis we identify whether the sources of the U.S. advantage are due to faster productivity growth, higher industry productivity levels relative to the country aggregate, different employment shares or faster change in employment shares of rapidly growing industries. The results show that U.S. productivity has grown faster than in the EU because of a larger employment share in the ICT producing sector and faster productivity growth in services industries that make intensive use of ICT. Wholesale and retail trade and the financial securities industry account for most of the difference in aggregate productivity growth between the EU and the U.S.

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File URL: http://www.conference-board.org/economics/workingpapers.cfm?pdf=E-0013-03-WP
File Function: Revised version, 2003
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Bibliographic Info

Paper provided by The Conference Board, Economics Program in its series Economics Program Working Papers with number 03-05.

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Length: 15 pages
Date of creation: Oct 2003
Date of revision:
Publication status: Published in CESifo Economic Studies, Vol. 49, 3/2003, pp. 295-318.
Handle: RePEc:cnf:wpaper:0305

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Keywords: ICT; productivity; services;

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References

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  1. Stephen D. Oliner & Daniel E. Sichel, 2002. "Information technology and productivity: where are we now and where are we going?," Economic Review, Federal Reserve Bank of Atlanta, issue Q3, pages 15-44.
  2. Trajtenberg, M. & Bresnahan, T.F., 1992. "General Purpose Technologies: "Engines of Growth"," Papers 16-92, Tel Aviv.
  3. Alessandra Colecchia & Paul Schreyer, 2002. "ICT Investment and Economic Growth in the 1990s: Is the United States a Unique Case? A Comparative Study of Nine OECD Countries," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(2), pages 408-442, April.
  4. Robert H. McGuckin & Kevin Stiroh, 2000. "Do Computers Make Output Harder to Measure?," Economics Program Working Papers 00-02, The Conference Board, Economics Program.
  5. Erik Brynjolfsson & Lorin M. Hitt, 2000. "Beyond Computation: Information Technology, Organizational Transformation and Business Performance," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 23-48, Fall.
  6. C.J. Krizan & John Haltiwanger & Lucia Foster, 2002. "The Link Between Aggregate and Micro Productivity Growth: Evidence from Retail Trade," Working Papers 02-18, Center for Economic Studies, U.S. Census Bureau.
  7. Ralph Kozlow, 2000. "International Accounts Data Needs: Plans, Progress, and Priorities," BEA Papers 0009, Bureau of Economic Analysis.
  8. Schreyer, Paul, 2002. "Computer Price Indices and International Growth and Productivity Comparisons," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(1), pages 15-31, March.
  9. Dale W. Jorgenson, 2001. "Information Technology and the U.S. Economy," American Economic Review, American Economic Association, vol. 91(1), pages 1-32, March.
  10. William D. Nordhaus, 2001. "The Progress of Computing," Cowles Foundation Discussion Papers 1324, Cowles Foundation for Research in Economics, Yale University.
  11. Kevin J. Stiroh, 2002. "Information Technology and the U.S. Productivity Revival: What Do the Industry Data Say?," American Economic Review, American Economic Association, vol. 92(5), pages 1559-1576, December.
  12. 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.
  13. Ark, Bart van & Inklaar, Robert & McGuckin, Robert H., 2003. "ICT and productivity in Europe and the United States," CCSO Working Papers 200311, University of Groningen, CCSO Centre for Economic Research.
  14. 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.
  15. repec:rus:hseeco:15966 is not listed on IDEAS
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Citations

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Cited by:
  1. Kaitila, Ville, 2006. "Productivity, Hours Worked, and Tax/Benefit Systems in Europe and Beyond," Discussion Papers 1015, The Research Institute of the Finnish Economy.
  2. Indjikian, Rouben & Siegel, Donald S., 2005. "The Impact of Investment in IT on Economic Performance: Implications for Developing Countries," World Development, Elsevier, vol. 33(5), pages 681-700, May.
  3. Theo S. Eicher & Thomas Strobel, 2008. "Germany’s Continued Productivity Slump: An Industry Analysis," Ifo Working Paper Series Ifo Working Paper No. 58, Ifo Institute for Economic Research at the University of Munich.
  4. Federico Biagi & Maria Laura Parisi & Lucia Vergano, 2008. "Organizational Innovations and Labor Productivity in a Panel of Italian Manufacturing Firms," Working Papers 0813, University of Brescia, Department of Economics.
  5. Juan F. Jimeno & Esther Moral & Lorena Saiz, 2006. "Structural breaks in labor productivity growth: the United States vs. the European Union," Banco de Espa�a Working Papers 0625, Banco de Espa�a.
  6. Theo Eicher & Oliver Röhn, 2007. "Sources of the German Productivity Demise – Tracing the Effects of Industry-Level ICT Investment," CESifo Working Paper Series 1896, CESifo Group Munich.
  7. Dimelis, Sophia P. & Papaioannou, Sotiris K., 2011. "ICT growth effects at the industry level: A comparison between the US and the EU," Information Economics and Policy, Elsevier, vol. 23(1), pages 37-50, March.
  8. FUKAO Kyoji & MIYAGAWA Tsutomu, 2007. "Productivity in Japan, the US, and the Major EU Economies: Is Japan Falling Behind?," Discussion papers 07046, Research Institute of Economy, Trade and Industry (RIETI).
  9. Wilhelm Kohler, 2006. "The “Lisbon Goal” of the EU: Rhetoric or Substance?," Journal of Industry, Competition and Trade, Springer, vol. 6(2), pages 85-113, June.

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