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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)

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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 Format: application/pdf
File Function: Revised version, 2003
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Publisher 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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Related research
Keywords: ICT; productivity; services;

Other versions of this item:

Find related papers by JEL classification:
N10 - Economic History - - Macroeconomics and Monetary Economics; Growth and Fluctuations - - - General, International, or Comparative
O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
O57 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Trajtenberg, M. & Bresnahan, T.F., 1992. "General Purpose Technologies: "Engines of Growth"," Papers 16-92, Tel Aviv.
    Other versions:
  2. 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, Directorate for Science, Technology and Industry. [Downloadable!]
  3. 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. [Downloadable!]
    Other versions:
  4. repec:rus:hseeco:15966 is not listed on IDEAS
  5. 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. [Downloadable!] (restricted)
  6. 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. [Downloadable!]
    Other versions:
  7. Dale W. Jorgenson, 2001. "Information Technology and the U.S. Economy," American Economic Review, American Economic Association, vol. 91(1), pages 1-32, March. [Downloadable!] (restricted)
  8. William D. Nordhaus, 2001. "The Progress of Computing," Cowles Foundation Discussion Papers 1324, Cowles Foundation, Yale University. [Downloadable!]
  9. Schreyer, Paul, 2002. "Computer Price Indices and International Growth and Productivity Comparisons," Review of Income and Wealth, Blackwell Publishing, vol. 48(1), pages 15-31, March. [Downloadable!] (restricted)
  10. Brynjolfsson, Erik & Hitt, Lorin M., 2004. "Computing Productivity: Firm-Level Evidence," Working papers 4210-01, Massachusetts Institute of Technology (MIT), Sloan School of Management. [Downloadable!]
    Other versions:
  11. 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. [Downloadable!] (restricted)
  12. J. Steven Landefeld & Barbara M. Fraumeni, 2001. "Measuring the New Economy," BEA Papers 0009, Bureau of Economic Analysis. [Downloadable!]
  13. 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. [Downloadable!]
    Other versions:
  14. 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. [Downloadable!]
  15. McGuckin, Robert H & Stiroh, Kevin J, 2001. " Do Computers Make Output Harder to Measure?," The Journal of Technology Transfer, Springer, vol. 26(4), pages 295-321, October. [Downloadable!] (restricted)
    Other versions:
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Fukao, Kyoji & Miyagawa, Tsutomu & Takizawa, Miho, 2007. "Productivity Growth and Resource Reallocation in Japan," CEI Working Paper Series 2007-9, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University. [Downloadable!]
    Other versions:
  2. Robert Inklaar & Marcel P. Timmer & Bart van Ark, 2006. "Mind the gap! International comparisons of productivity in services and goods production," Hi-Stat Discussion Paper Series d06-175, Institute of Economic Research, Hitotsubashi University. [Downloadable!]
    Other versions:
  3. Theo Eicher & Oliver Röhn, 2007. "Sources of the German Productivity Demise – Tracing the Effects of Industry-Level ICT Investment," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  4. Juan F. Jimeno & Esther Moral & Lorena Saiz, 2006. "Structural breaks in labor productivity growth: the United States vs. the European Union," Banco de España Working Papers 0625, Banco de España. [Downloadable!]
  5. 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. [Downloadable!] (restricted)
  6. 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. [Downloadable!]
  7. 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). [Downloadable!]
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