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Information technology and economic performance in U.S industries


  • Elena Ketteni


We study the relationship between information technology (IT) and economic performance, to explore whether IT-capital promotes productivity growth. We use a data set similar to that of previous researchers, but employ non-parametric estimation techniques in order to directly estimate the output elasticities of IT for each industry and time period. We find that IT has a positive effect on productivity, which varies among industries and time. Moreover, adjustment costs are important when identifying this effect. Finally, IT-capital growth appears to be raising income in all industries used in our sample, even those that experienced output reduction.

Suggested Citation

  • Elena Ketteni, 2009. "Information technology and economic performance in U.S industries," Canadian Journal of Economics, Canadian Economics Association, vol. 42(3), pages 844-865, August.
  • Handle: RePEc:cje:issued:v:42:y:2009:i:3:p:844-865

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    References listed on IDEAS

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    Cited by:

    1. Giorgio Canarella & Stephen M. Miller, 2017. "The Determinants of Growth in the Information and Communication Technology (ICT) Industry: A Firm-Level Analysis," Working papers 2017-12, University of Connecticut, Department of Economics.
    2. Liao, Hailin & Wang, Bin & Li, Baibing & Weyman-Jones, Tom, 2016. "ICT as a general-purpose technology: The productivity of ICT in the United States revisited," Information Economics and Policy, Elsevier, vol. 36(C), pages 10-25.
    3. Elena Ketteni & Theofanis Mamuneas & Panos Pashardes, 2013. "ICT and Energy Use: Patterns of Substitutability and Complementarity in Production," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 7(1), pages 63-86, June.
    4. Azomahou, Theophile & Diene, Mbaye, 2012. "Income polarization and innovation: Evidence from African economies," MERIT Working Papers 048, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

    More about this item

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity


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