IDEAS home Printed from https://ideas.repec.org/a/eee/tefoso/v187y2023ics0040162522007429.html

Technology growth in the digital age: Evidence from China

Author

Listed:
  • Jin, Canyang
  • Xu, Aiting
  • Zhu, Yuhan
  • Li, Jinchang

Abstract

Based on a broad definition of the digital economy, this study constructs a digital technology capital measurement framework and measures China's digital technology capital services from 2002 to 2018 to illustrate the growth of digital technology. In addition, the relationship between digital technology and economic growth is examined using the growth accounting method and econometric panel models from the perspective of the substitution and penetration effects of information and communication technologies. The measurement results show that China's digital technology capital services grew faster than non-digital ones from 2002 to 2018. In terms of the substitution effect, the contribution of traditional capital to economic growth is diminishing, whereas digital technology capital's contribution is expanding. Regarding the penetration effect, the contribution of digital technology capital to labor productivity is gradually overtaking that of traditional capital, with the impact varying by sector. These results may provide developing countries with a strategy to seek new development drivers and sustain economic growth in the post-pandemic era.

Suggested Citation

  • Jin, Canyang & Xu, Aiting & Zhu, Yuhan & Li, Jinchang, 2023. "Technology growth in the digital age: Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 187(C).
    • Handle: RePEc:eee:tefoso:v:187:y:2023:i:c:s0040162522007429
    DOI: 10.1016/j.techfore.2022.122221
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0040162522007429
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.techfore.2022.122221?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Ayoub Yousefi, 2011. "The impact of information and communication technology on economic growth: evidence from developed and developing countries," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 20(6), pages 581-596, November.
    2. Hussain, Ammar & Batool, Irem & Akbar, Minhas & Nazir, Marina, 2021. "Is ICT an enduring driver of economic growth? Evidence from South Asian economies," Telecommunications Policy, Elsevier, vol. 45(8).
    3. Hardy, Andrew P., 1980. "The role of the telephone in economic development," Telecommunications Policy, Elsevier, vol. 4(4), pages 278-286, December.
    4. Stephen D. Oliner & Daniel E. Sichel, 2000. "The Resurgence of Growth in the Late 1990s: Is Information Technology the Story?," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 3-22, Fall.
    5. Cheng, Chih-Yang & Chien, Mei-Se & Lee, Chien-Chiang, 2021. "ICT diffusion, financial development, and economic growth: An international cross-country analysis," Economic Modelling, Elsevier, vol. 94(C), pages 662-671.
    6. D. W. Jorgenson & Z. Griliches, 1967. "The Explanation of Productivity Change," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 34(3), pages 249-283.
    7. Appiah-Otoo, Isaac & Song, Na, 2021. "The impact of ICT on economic growth-Comparing rich and poor countries," Telecommunications Policy, Elsevier, vol. 45(2).
    8. Paul Schreyer, 2004. "Capital Stocks, Capital Services and Multi-Factor Productivity Measures," OECD Economic Studies, OECD Publishing, vol. 2003(2), pages 163-184.
    9. David M. Byrne & Stephen D. Oliner & Daniel E. Sichel, 2013. "Is the Information Technology Revolution Over?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 25, pages 20-36, Spring.
    10. Kallal, Rahim & Haddaji, Abir & Ftiti, Zied, 2021. "ICT diffusion and economic growth: Evidence from the sectorial analysis of a periphery country," Technological Forecasting and Social Change, Elsevier, vol. 162(C).
    11. Henry, Michael & Kneller, Richard & Milner, Chris, 2009. "Trade, technology transfer and national efficiency in developing countries," European Economic Review, Elsevier, vol. 53(2), pages 237-254, February.
    12. Erumban, Abdul A. & Das, Deb Kusum, 2016. "Information and communication technology and economic growth in India," Telecommunications Policy, Elsevier, vol. 40(5), pages 412-431.
    13. Stephen D. Oliner & Daniel E. Sichel, 1994. "Computers and Output Growth Revisited: How Big Is the Puzzle?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(2), pages 273-334.
    14. Kevin J. Stiroh, 2002. "Information Technology and the U.S. Productivity Revival: What Do the Industry Data Say?," American Economic Review, American Economic Association, vol. 92(5), pages 1559-1576, December.
    15. Joseph Pasky Ngameni & Ludovic Feulefack Kemmanang & Sylvain Bertelet Ngassam, 2022. "Growth Gap between China and Africa: Do Digital Technologies Matter?," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(1), pages 24-43, March.
    16. Börje Johansson & Charlie Karlsson & Roger Stough (ed.), 2006. "The Emerging Digital Economy," Advances in Spatial Science, Springer, number 978-3-540-34488-9.
    17. Pan, Wenrong & Xie, Tao & Wang, Zhuwang & Ma, Lisha, 2022. "Digital economy: An innovation driver for total factor productivity," Journal of Business Research, Elsevier, vol. 139(C), pages 303-311.
    18. Choi, Changkyu & Hoon Yi, Myung, 2009. "The effect of the Internet on economic growth: Evidence from cross-country panel data," Economics Letters, Elsevier, vol. 105(1), pages 39-41, October.
    19. Börje Johansson & Charlie Karlsson & Roger R. Stough, 2006. "Entrepreneurship, Clusters and Policy in the Emerging Digital Economy," Advances in Spatial Science, in: Börje Johansson & Charlie Karlsson & Roger Stough (ed.), The Emerging Digital Economy, chapter 1, pages 1-19, Springer.
    20. Charles Shaaba Saba & Nicholas Ngepah, 2022. "ICT Diffusion, Industrialisation and Economic Growth Nexus: an International Cross-country Analysis," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(3), pages 2030-2069, September.
    21. W. Edward STEINMUELLER, 2001. "ICTs and the possibilities for leapfrogging by developing countries," International Labour Review, International Labour Organization, vol. 140(2), pages 193-210, June.
    22. Robert Inklaar & Mary O'Mahony & Marcel Timmer, 2005. "ICT AND EUROPE's PRODUCTIVITY PERFORMANCE: INDUSTRY‐LEVEL GROWTH ACCOUNT COMPARISONS WITH THE UNITED STATES," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(4), pages 505-536, December.
    23. Komatsuzaki, Seisuke, 1982. "Social impacts of new communications media the Japanese experience," Telecommunications Policy, Elsevier, vol. 6(4), pages 269-275, December.
    24. Bart van Ark & Mary O'Mahoney & Marcel P. Timmer, 2008. "The Productivity Gap between Europe and the United States: Trends and Causes," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 25-44, Winter.
    25. Abbasinejad Hossein & Gudarzi Farahani Yazdan & Asghari Ghara Ehsan, 2012. "The relationship between energy consumption, energy prices and economic growth: case study (OPEC countries)," OPEC Energy Review, Organization of the Petroleum Exporting Countries, vol. 36(3), pages 272-286, September.
    26. Dale W. Jorgenson, 2001. "Information Technology and the U.S. Economy," Higher School of Economics Economic Journal Экономический журнал Высшей школы экономики, CyberLeninka;Федеральное государственное автономное образовательное учреждение высшего образования «Национальный исследовательский университет «Высшая школа экономики», vol. 5(1), pages 3-34.
    27. repec:dgr:rugggd:200256 is not listed on IDEAS
    28. Goel, Rajeev K. & Saunoris, James W. & Goel, Srishti S., 2021. "Supply chain performance and economic growth: The impact of COVID-19 disruptions," Journal of Policy Modeling, Elsevier, vol. 43(2), pages 298-316.
    29. Sawng, Yeong-wha & Kim, Pang-ryong & Park, JiYoung, 2021. "ICT investment and GDP growth: Causality analysis for the case of Korea," Telecommunications Policy, Elsevier, vol. 45(7).
    30. Ark, Bart van, 2002. "ICT investments and growth accounts for the European Union," GGDC Research Memorandum 200256, Groningen Growth and Development Centre, University of Groningen.
    31. Stephen D. Oliner & Daniel E. Sichel, 2000. "The resurgence of growth in the late 1990s: is information technology the story?," Proceedings, Federal Reserve Bank of San Francisco.
    32. Huub Meijers, 2014. "Does the internet generate economic growth, international trade, or both?," International Economics and Economic Policy, Springer, vol. 11(1), pages 137-163, February.
    33. Ward, Michael R. & Zheng, Shilin, 2016. "Mobile telecommunications service and economic growth: Evidence from China," Telecommunications Policy, Elsevier, vol. 40(2), pages 89-101.
    34. Simon Commander & Rupert Harrison & Naercio Menezes-Filho, 2011. "ICT and Productivity in Developing Countries: New Firm-Level Evidence from Brazil and India," The Review of Economics and Statistics, MIT Press, vol. 93(2), pages 528-541, May.
    35. Madden, Gary & Savage, Scott J., 1998. "CEE telecommunications investment and economic growth," Information Economics and Policy, Elsevier, vol. 10(2), pages 173-195, June.
    36. Jorgenson, Dale W. & Vu, Khuong M., 2016. "The ICT revolution, world economic growth, and policy issues," Telecommunications Policy, Elsevier, vol. 40(5), pages 383-397.
    37. repec:aei:rpaper:37301 is not listed on IDEAS
    38. Dvornik, Darko & Sabolić, Dubravko, 2007. "Telecommunication liberalization and economic development in European countries in transition," Technology in Society, Elsevier, vol. 29(4), pages 378-387.
    39. Heshmati, Almas & Yang, Wanshan, 2006. "Contribution of ICT to the Chinese Economic Growth," Ratio Working Papers 91, The Ratio Institute.
    40. Vu, Khuong M., 2013. "Information and Communication Technology (ICT) and Singapore’s economic growth," Information Economics and Policy, Elsevier, vol. 25(4), pages 284-300.
    41. Dale W. Jorgenson & Mun S. Ho & Kevin J. Stiroh, 2005. "Productivity, Volume 3: Information Technology and the American Growth Resurgence," MIT Press Books, The MIT Press, edition 1, volume 3, number 0262101114, December.
    42. Gaaitzen J. De Vries & Nanno Mulder & Mariela Dal Borgo & Andre A. Hofman, 2010. "ICT Investment in Latin America: Does it Matter for Economic Growth?," Chapters, in: Mario Cimoli & André A. Hofman & Nanno Mulder (ed.), Innovation and Economic Development, chapter 4, Edward Elgar Publishing.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mi Zhou & Weixiao Shao & Li Huang, 2025. "From digital island to resilient networks: the impact of digital economy agglomeration on urban resilience in China," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-16, December.
    2. Luo, Kang & Lee, Chien-Chiang & Zeng, Mingli & Hu, Weihui, 2024. "How does the development of digital economy in central cities promote the coordinated development of regions? Evidence from 19 urban agglomerations in China," Technology in Society, Elsevier, vol. 78(C).
    3. Pengfei Zhou & Yang Cai & Yang Shen, 2025. "Research on the Impact and Mechanism of Digital Technology on the Synergistic Governance of Pollution and Carbon Reduction," Sustainability, MDPI, vol. 17(16), pages 1-31, August.
    4. Fan, Di & Ding, Jiayan & Wu, Sihong & Su, Yiyi, 2025. "Firewalls or frontlines: Geopolitical tensions and multinationals' digital technology upgrading," Technological Forecasting and Social Change, Elsevier, vol. 216(C).
    5. Lingling Tan & Kehui Wang & Huifang Zhang, 2025. "How Does Digital Transformation Catalyze New-Quality Productivity? Unraveling the Path Through Green Innovation and the Role of Digital Financial Inclusion," Sustainability, MDPI, vol. 17(20), pages 1-32, October.
    6. Pingkuo Liu & Jiahao Wu, 2023. "Game Analysis on Energy Enterprises’ Digital Transformation—Strategic Simulation for Guiding Role, Leading Role and Following Role," Sustainability, MDPI, vol. 15(13), pages 1-33, June.
    7. Vu, Khuong & Lu, Yiya & Shiba, Saya, 2025. "The evolution of the digital economy: Comparative insights from China and the United States, 1995–2020," Telecommunications Policy, Elsevier, vol. 49(10).
    8. Ding, Xiangan & Appolloni, Andrea & Shahzad, Mohsin & Liu, Yue & Han, Shaojie, 2025. "Digital transformation and total factor productivity in manufacturing firms: Evidence of corporate public responsibilities in China," Technology in Society, Elsevier, vol. 82(C).
    9. Cheng, Yiran & Zhou, Xiaorui & Li, Yongjian, 2023. "The effect of digital transformation on real economy enterprises’ total factor productivity," International Review of Economics & Finance, Elsevier, vol. 85(C), pages 488-501.
    10. Zhao, Ruizeng & Sun, Jiasen & Wang, Xinyue, 2024. "Synergistic impact of digital finance and urban agglomeration policy on carbon emission reduction," International Review of Economics & Finance, Elsevier, vol. 96(PB).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sawng, Yeong-wha & Kim, Pang-ryong & Park, JiYoung, 2021. "ICT investment and GDP growth: Causality analysis for the case of Korea," Telecommunications Policy, Elsevier, vol. 45(7).
    2. Stamopoulos, Dimitrios & Dimas, Petros & Tsakanikas, Aggelos, 2022. "Exploring the structural effects of the ICT sector in the Greek economy: A quantitative approach based on input-output and network analysis," Telecommunications Policy, Elsevier, vol. 46(7).
    3. Qing Li & Yanrui Wu, 2023. "ICT, technological diffusion and economic growth in Chinese cities," Empirical Economics, Springer, vol. 64(4), pages 1737-1768, April.
    4. Niebel, Thomas, 2018. "ICT and economic growth – Comparing developing, emerging and developed countries," World Development, Elsevier, vol. 104(C), pages 197-211.
    5. Ronald Ravinesh Kumar & Peter Josef Stauvermann & Nikeel Kumar & Syed Jawad Hussain Shahzad, 2019. "Exploring the effect of ICT and tourism on economic growth: a study of Israel," Economic Change and Restructuring, Springer, vol. 52(3), pages 221-254, August.
    6. Bakari, Sayef & Tiba, Sofien, 2020. "The Impact of Internet on Economic Growth in North Africa: New empirical and policy analysis," MPRA Paper 100609, University Library of Munich, Germany.
    7. Awad, Atif & Albaity, Mohamed, 2022. "ICT and economic growth in Sub-Saharan Africa: Transmission channels and effects," Telecommunications Policy, Elsevier, vol. 46(8).
    8. Vu, Khuong & Hanafizadeh, Payam & Bohlin, Erik, 2020. "ICT as a driver of economic growth: A survey of the literature and directions for future research," Telecommunications Policy, Elsevier, vol. 44(2).
    9. Oliner, Stephen D. & Sichel, Daniel E. & Stiroh, Kevin J., 2008. "Explaining a productive decade," Journal of Policy Modeling, Elsevier, vol. 30(4), pages 633-673.
    10. Huifang E & Shuangjie Li & Liming Wang & Huidan Xue, 2023. "The Impact of ICT Capital Services on Economic Growth and Energy Efficiency in China," Energies, MDPI, vol. 16(9), pages 1-21, May.
    11. Kumar, Ronald Ravinesh & Stauvermann, Peter Josef & Samitas, Aristeidis, 2016. "The effects of ICT⁎ on output per worker: A study of the Chinese economy," Telecommunications Policy, Elsevier, vol. 40(2), pages 102-115.
    12. Ronald Ravinesh Kumar & Peter Josef Stauvermann & Syed Jawad Hussain Shahzad, 2017. "Can technology provide a glimmer of hope for economic growth in the midst of chaos? A case of Zimbabwe," Quality & Quantity: International Journal of Methodology, Springer, vol. 51(2), pages 919-939, March.
    13. Li, Qing & Wu, Yanrui, 2020. "Intangible capital, ICT and sector growth in China," Telecommunications Policy, Elsevier, vol. 44(1).
    14. Federico Biagi, 2013. "ICT and Productivity: A Review of the Literature," JRC Working Papers on Digital Economy 2013-09, Joint Research Centre.
    15. Vu, Khuong M., 2013. "Information and Communication Technology (ICT) and Singapore’s economic growth," Information Economics and Policy, Elsevier, vol. 25(4), pages 284-300.
    16. Di Wang & Jianing Sun & Renhao Yang & Kangchuan Su & Qingyuan Yang, 2024. "ICTs and economic performance nexus: meta-analysis evidence from country-specific data," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 11(1), pages 1-14, December.
    17. Edquist, Harald & Henrekson, Magnus, 2017. "Swedish lessons: How important are ICT and R&D to economic growth?," Structural Change and Economic Dynamics, Elsevier, vol. 42(C), pages 1-12.
    18. Habib Ur Rahman & Ghulam Ali & Umer Zaman & Carlo Pugnetti, 2021. "Role of ICT Investment and Diffusion in the Economic Growth: A Threshold Approach for the Empirical Evidence from Pakistan," IJFS, MDPI, vol. 9(1), pages 1-14, March.
    19. Charles Shaaba Saba & Nicholas Ngepah & Nicholas M. Odhiambo, 2024. "Information and Communication Technology (ICT), Growth and Development in Developing Regions: Evidence from a Comparative Analysis and a New Approach," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(3), pages 14700-14748, September.
    20. Kallal, Rahim & Haddaji, Abir & Ftiti, Zied, 2021. "ICT diffusion and economic growth: Evidence from the sectorial analysis of a periphery country," Technological Forecasting and Social Change, Elsevier, vol. 162(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:tefoso:v:187:y:2023:i:c:s0040162522007429. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.sciencedirect.com/science/journal/00401625 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.