Do ICT spillovers matter; evidence from Dutch firm-level data
AbstractThis paper presents an empirical analysis of the contribution of Information Communication and Technology (ICT) to labour productivity growth in the 1990s, using an extensive panel of firm-level data for Dutch market services. We estimate enhanced production function models that include ICT spillovers as well as innovation as a component of TFP (growth). Additionally, we compare the results of this approach with the growth-accounting approach carried out at the firm level. Doing so, we attempt to reconcile the different pieces of empirical evidence regarding the contribution of ICT to productivity growth reported in the literature so far. It is shown that, after accounting for ICT spillovers, the relatively high estimated elasticities of own ICT capital at the firm level are substantially reduced. So, they are more consistent with findings for aggregated levels reported in growth-accounting studies. Nevertheless, the latter studies do not disentangle the causes of TFP-growth into ultimate causes like productivity growth arising from ICT spillovers. Our results underline that the contribution of those spillovers in the years of the ICT boom was probably more substantial than the contribution of ICT capital deepening.
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Bibliographic InfoPaper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Discussion Paper with number 26.
Date of creation: Dec 2003
Date of revision:
Find related papers by JEL classification:
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- L80 - Industrial Organization - - Industry Studies: Services - - - General
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-11-30 (All new papers)
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