The Impact of ICT on Growth in Transition Economies
AbstractThe paper analyzes the multi-channel contribution of Information and Communication Technologies (ICT) to output and labour productivity growth in eight transition economies of Central and Eastern Europe (CEE), i.e. Bulgaria, Czech Republic, Hungary, Poland, Romania, Russia, Slovakia and Slovenia between 1995-2001. The impact of ICT on growth in the new five EU member countries (Czech Republic, Hungary, Poland, Slovakia and Slovenia) was higher than the average for the former EU-15. Hence, ICT - through both the capital deepening and TFP growth in ICT-producing sector - contributed to convergence of the level of income between those countries and the EU-15. This was however not the case for Bulgaria, Romania, and Russia, where ICT contribution to growth was lower than in the EU- 15. ICT thus led to income deconvergence. Future growth prospects of the CEE countries, including Russia, will largely depend on further ICT investments and an ability to ensure their productive use on a macro, industry and micro level. The paper speculates that ICT capital will have a significant contribution to long-term growth in Poland, taken as a proxy for other CEE countries, on the level of 15% of the projected average annual GDP growth of 4% until 2025. This projection does not however take into account the potential for emergence of new applications of ICT, which could stimulate further increases in aggregate productivity. Neither does it measure the possible contribution from TFP growth in ICT sector and from the spillover effects of ICT production and use. The paper argues that the potential of ICT will not however be realized without changes in business models and an increase in the quality of human capital and ICT skills. On the macrolevel, as indicated by the New Economy Indicator, ICT will not benefit CEE countries without them making consistent progress in economic, institutional and regulatory environment.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 29399.
Date of creation: 01 Jul 2004
Date of revision:
productivity; ICT; Eastern Europe;
Find related papers by JEL classification:
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
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.:
- Stephen D. Oliner & Daniel E. Sichel, 2002.
"Information technology and productivity: where are we now and where are we going?,"
Federal Reserve Bank of Atlanta, issue Q3, pages 15-44.
- Oliner, Stephen D. & Sichel, Daniel E., 2003. "Information technology and productivity: where are we now and where are we going?," Journal of Policy Modeling, Elsevier, vol. 25(5), pages 477-503, July.
- Stephen D. Oliner & Daniel E. Sichel, 2002. "Information technology and productivity: where are we now and where are we going?," Finance and Economics Discussion Series 2002-29, Board of Governors of the Federal Reserve System (U.S.).
- Carol Corrado, 2003. "Industrial production and capacity utilization: the 2002 historical and annual revision," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Apr, pages 151-176.
- Jalava, Jukka & Pohjola, Matti, 2002.
"Economic growth in the New Economy: evidence from advanced economies,"
Information Economics and Policy,
Elsevier, vol. 14(2), pages 189-210, June.
- Jalava, Jukka & Pohjola, Matti, 2001. "Economic Growth in the New Economy. Evidence from Advanced Economies," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Il Houng Lee & Yougesh Khatri, 2003. "Information Technology and Productivity Growth in Asia," IMF Working Papers 03/15, International Monetary Fund.
- Marcin Piatkowski, 2004. "Does ICT Investment Matter for Growth and Labor Productivity in Transition Economies?," Development and Comp Systems 0402008, EconWPA.
- David, Paul A, 1990. "The Dynamo and the Computer: An Historical Perspective on the Modern Productivity Paradox," American Economic Review, American Economic Association, vol. 80(2), pages 355-61, May.
- Dale W. Jorgenson, 2001. "Information Technology and the U.S. Economy," American Economic Review, American Economic Association, vol. 91(1), pages 1-32, March.
- Ana Aizcorbe & Kenneth Flamm & Anjum Khurshid, 2002. "The role of semiconductor inputs in IT hardware price decline: computers vs. communications," Finance and Economics Discussion Series 2002-37, Board of Governors of the Federal Reserve System (U.S.).
- Diana Mihaela Apostol & Cristina Balaceanu, 2011. "Growth and Technology: The New Economy in the 2000's CEE Countries and Romania," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 1(2), pages 46-55, December.
- Samoilenko, Sergey & Osei-Bryson, Kweku-Muata, 2008. "An exploration of the effects of the interaction between ICT and labor force on economic growth in transition economies," International Journal of Production Economics, Elsevier, vol. 115(2), pages 471-481, October.
- Leitão, João & Ferreira, João, 2007. "Liberalization of European Telecommunications and Entrepreneurship: Why German and Portuguese Experiences are so Equal and so Different?," MPRA Paper 5728, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.