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The modern drivers of productivity

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  • Venturini, Francesco

Abstract

This paper studies the role of technology spillovers in productivity growth of OECD countries looking at investments in Information and Communication Technology (ICT) and Research & Development (R&D). We find that both forms of technologically advanced capital (ICT and R&D) influence total factor productivity (TFP) over the long run: the former effect derives from externalities related to the use of ICT capital, the latter from knowledge spillovers generated by research performed to produce ICT goods. These findings are robust to controlling for import penetration of ICT products and the underlying R&D. Our evidence suggests that: (i) investing in ICT capital delivers significant productivity benefits, (ii) domestic production of ICT goods is source of important knowledge spillovers, and that (iii) in terms of TFP gains a low degree of industry specialization in information technology cannot be compensated by a country's trade openness, i.e., by importing ICT goods. These results help to explain trends in high-tech specialization and international trade.

Suggested Citation

  • Venturini, Francesco, 2015. "The modern drivers of productivity," Research Policy, Elsevier, vol. 44(2), pages 357-369.
  • Handle: RePEc:eee:respol:v:44:y:2015:i:2:p:357-369
    DOI: 10.1016/j.respol.2014.10.011
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    1. repec:kap:sbusec:v:51:y:2018:i:1:d:10.1007_s11187-017-9921-3 is not listed on IDEAS
    2. Fonseca, Tiago & Lima, Francisco & Pereira, Sonia C., 2018. "Understanding productivity dynamics: A task taxonomy approach," Research Policy, Elsevier, vol. 47(1), pages 289-304.
    3. Francesco Venturini & Ana Rincon-Aznar & Dr Michela Vecchi, 2013. "ICT as a general purpose technology: spillovers, absorptive capacity and productivity performance," National Institute of Economic and Social Research (NIESR) Discussion Papers 416, National Institute of Economic and Social Research.
    4. repec:spr:jknowl:v:8:y:2017:i:2:d:10.1007_s13132-016-0441-1 is not listed on IDEAS
    5. Christiaan Hogendorn & Brett Frischmann, 2017. "Infrastructure and General Purpose Technologies: A Technology Flow Framework," Wesleyan Economics Working Papers 2017-001, Wesleyan University, Department of Economics.
    6. repec:spr:soinre:v:133:y:2017:i:3:d:10.1007_s11205-016-1402-6 is not listed on IDEAS
    7. repec:eee:rensus:v:77:y:2017:i:c:p:273-286 is not listed on IDEAS
    8. Gehringer, Agnieszka, 2016. "Knowledge externalities and sectoral interdependences: Evidence from an open economy perspective," Technological Forecasting and Social Change, Elsevier, vol. 102(C), pages 240-249.

    More about this item

    Keywords

    Information technology; Research & Development; Spillovers; Trade; Productivity;

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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