Information and Communication Technologies, Market Rigidities and Growth: Implications for EU Policies
AbstractThe renewed Lisbon strategy puts special emphasis on the potential role that Information and Communication Technologies can play in meeting the challenges of boosting growth, competitiveness and cohesion throughout the EU. There is also a general understanding among policy makers that investment of this kind and its related economic benefits can only materialize if labour, capital, product and service markets are flexible enough to facilitate ICT investment and the re-organisation of economic activities. This paper provides evidence of the influence of market rigidities on the propensity to invest in ICT and on the economic return of ICT investment in a number of EU countries, and in the US and Japan. We provide evidence that indicates that market rigidities deter ICT investment and lower the impact of ICT on GDP growth by considering a number of indicators reflecting barriers to business creation and the degree of market regulation in labour and capital markets. These results are invariant, even when other potential determinants of ICT investments and ICT contribution to GDP growth such as the degree of specialisation in ICT-producing industries, past ICT investment, business cycles conditions and a measure of trade openness are controlled for. The paper provides a number of policy implications, most notably, regarding the role played by structural reforms in promoting both ICT adoption and setting the best framework conditions for ICT impact on GDP growth. While the renewed EU Lisbon strategy of economic reforms is badly needed to increase EU growth potential, we show here that this strategy is also needed to promote technological change in the EU economy.
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 5838.
Date of creation: 20 Nov 2007
Date of revision:
Information and Communication Technologies; ICT; Growth; European Union; Lisbon Strategy;
Find related papers by JEL classification:
- E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-11-24 (All new papers)
- NEP-EEC-2007-11-24 (European Economics)
- NEP-ICT-2007-11-24 (Information & Communication Technologies)
- NEP-MAC-2007-11-24 (Macroeconomics)
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.:
- Djankov, Simeon & La Porta, Rafael & López-de-Silanes, Florencio & Shleifer, Andrei, 2001.
"The Regulation of Entry,"
CEPR Discussion Papers
2953, C.E.P.R. Discussion Papers.
- Djankov, Simeon & La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei, 2001. "The Regulation of Entry," Working Paper Series rwp01-015, Harvard University, John F. Kennedy School of Government.
- Simeon Djankov & Rafael La Porta & Florencio Lopez-de-Silanes & Andre Shleifer, 2000. "The Regulation of Entry," Harvard Institute of Economic Research Working Papers 1904, Harvard - Institute of Economic Research.
- Simeon Djankov & Rafael LaPorta & Florencio Lopez-de-Silanes & Andrei Shleifer, . "The Regulation of Entry," Working Paper 19462, Harvard University OpenScholar.
- Djankov, Simeon & La Porta, Rafael & Shleifer, Andrei & Lopez de Silanes, Florencio, 2001. "The regulation of entry," Policy Research Working Paper Series 2661, The World Bank.
- Simeon Djankov & Rafael La Porta & Florencio LopezdeSilanes & Andrei Shleifer, 2000. "The Regulation of Entry," NBER Working Papers 7892, National Bureau of Economic Research, Inc.
- Ciccone, Antonio & Papaioannou, Elias, 2007.
"Red tape and delayed entry,"
Working Paper Series
0758, European Central Bank.
- Gust, Christopher & Marquez, Jaime, 2004.
"International comparisons of productivity growth: the role of information technology and regulatory practices,"
Elsevier, vol. 11(1), pages 33-58, February.
- Christopher Gust & Jaime Marquez, 2002. "International comparisons of productivity growth: the role of information technology and regulatory practices," International Finance Discussion Papers 727, Board of Governors of the Federal Reserve System (U.S.).
- Carone, Giuseppe & Denis, Cécile & Mc Morrow, Kieran & Mourre, Gilles & Röger, Werner, 2006.
"Long-term labour productivity and GDP projections for the EU25 Member States : a production function framework,"
744, University Library of Munich, Germany.
- Giuseppe Carone & C�cile Denis & Kieran Mc Morrow & Gilles Mourre & Werner R�ger, 2006. "Long-term labour productivity and GDP projections for the EU25 Member States : a production function framework," European Economy - Economic Papers 253, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
- Babetskii, Ian & Campos, Nauro F., 2007.
"Does reform work? An econometric examination of the reform-growth puzzle,"
BOFIT Discussion Papers
13/2007, Bank of Finland, Institute for Economies in Transition.
- Ian Babetskii & Nauro F. Campos, 2007. "Does Reform Work? An Econometric Examination of the Reform-Growth Puzzle," CERGE-EI Working Papers wp322, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
- Babetskii, Ian & Campos, Nauro F, 2007. "Does Reform Work? An Econometric Examination of the Reform-Growth Puzzle," IZA Discussion Papers 2638, Institute for the Study of Labor (IZA).
- Ian Babetskii & Nauro Campos, 2006. "Does Reform Work? An Econometric Examination of the Reform-Growth Puzzle," William Davidson Institute Working Papers Series wp870, William Davidson Institute at the University of Michigan.
- Ian Babetskii & Nauro F. Campos, 2007. "Does Reform Work? An Econometric Examination of the Reform-Growth Puzzle," Working Papers 2007/2, Czech National Bank, Research Department.
- Babetskii, Ian & Campos, Nauro F, 2007. "Does Reform Work? An Econometric Examination of the Reform-Growth Puzzle," CEPR Discussion Papers 6215, C.E.P.R. Discussion Papers.
- Patrick Aubert & Eve Caroli & Muriel Roger, 2006.
"New technologies, organisation and age: firm-level evidence,"
Royal Economic Society, vol. 116(509), pages F73-F93, 02.
- Roger, Muriel & Aubert, Patrick & Caroli, Eve, 2006. "New technologies, organisation and age: firm-level evidence," Economics Papers from University Paris Dauphine 123456789/10051, Paris Dauphine University.
- Irene Bertschek & Ulrich Kaiser, 2004.
"Productivity Effects of Organizational Change: Microeconometric Evidence,"
INFORMS, vol. 50(3), pages 394-404, March.
- Bertschek, Irene & Kaiser, Ulrich, 2001. "Productivity effects of organizational change: microeconometric evidence," ZEW Discussion Papers 01-32, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- C. Denis & K. Mc Morrow & W. R�ger & R. Veugelers, 2005. "The Lisbon Strategy and the EU's structural productivity problem," European Economy - Economic Papers 221, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
- Aghion, P. & Howitt, P., 1989.
"A Model Of Growth Through Creative Destruction,"
UWO Department of Economics Working Papers
8904, University of Western Ontario, Department of Economics.
- Aghion, P. & Howitt, P., 1990. "A Model Of Growth Through Creative Destruction," DELTA Working Papers 90-12, DELTA (Ecole normale supérieure).
- Aghion, P. & Howitt, P., 1989. "A Model Of Growth Through Creative Destruction," Working papers 527, Massachusetts Institute of Technology (MIT), Department of Economics.
- Philippe Aghion & Peter Howitt, 1990. "A Model of Growth Through Creative Destruction," NBER Working Papers 3223, National Bureau of Economic Research, Inc.
- Arellano, Manuel & Bond, Stephen, 1991.
"Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations,"
Review of Economic Studies,
Wiley Blackwell, vol. 58(2), pages 277-97, April.
- Tom Doan, . "RATS program to replicate Arellano-Bond 1991 dynamic panel," Statistical Software Components RTZ00169, Boston College Department of Economics.
- Paul Conway & Donato de Rosa & Giuseppe Nicoletti & Faye Steiner, 2006. "Regulation, Competition and Productivity Convergence," OECD Economics Department Working Papers 509, OECD Publishing.
- Loof, Hans, 2004.
"Dynamic optimal capital structure and technical change,"
Structural Change and Economic Dynamics,
Elsevier, vol. 15(4), pages 449-468, December.
- Lööf, Hans, 2004. "Dynamic Optimal Capital Structure and Technical Change," Working Paper Series in Economics and Institutions of Innovation 23, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
- Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 1999.
"Information Technology, Workplace Organization and the Demand for Skilled Labor: Firm-Level Evidence,"
NBER Working Papers
7136, National Bureau of Economic Research, Inc.
- Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 2002. "Information Technology, Workplace Organization, And The Demand For Skilled Labor: Firm-Level Evidence," The Quarterly Journal of Economics, MIT Press, vol. 117(1), pages 339-376, February.
- Barrios, Salvador & Mas, Matilde & Navajas, Elena & Quesada, Javier, 2008. "Mapping the ICT in EU Regions: Location, Employment, Factors of Attractiveness and Economic Impact," MPRA Paper 6998, University Library of Munich, Germany.
- Li, Yanfei & Yao, Shuntian & Chia, Wai-Mun, 2009. "Endogenous Firm and Information Rent Under Demand Uncertainty," MPRA Paper 13506, University Library of Munich, Germany, revised 16 Feb 2009.
- Kaushalesh Lal & Theo Dunnewijk, 2008.
"Entrepreneurship and Innovation Strategies in ICT SMEs in Enlarged Europe (EU25),"
- Lal, Kaushalesh & Dunnewijk, Theo, 2008. "Entrepreneurship and Innovation Strategies in ICT SMEs in Enlarged Europe (EU25)," MERIT Working Papers 016, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
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.