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Productivity, innovation and ICT in Old and New Europe

  • Bart van Ark

    ()

  • Marcin Piatkowski

    ()

This paper investigates the productivity performance of CEE countries vis-Ã -vis the EU-15 during the 1990s to detect sources of convergence between the two regions. The paper shows that changes in labour intensity have been an important source of productivity convergence during the 1990s, and are likely to remain so in the near future. It is also found that despite lower income levels, ICT capital in the CEE-10 has contributed as much to labour productivity growth as in the EU-15. Industry analysis shows that manufacturing industries that have invested heavily in ICT have been key to the restructuring process. As such ICT may therefore have been an important source of growth but probably temporary source of convergence. In the longer run the impact of ICT on growth will have to come primarily from its productive use in services. The paper therefore includes a New Economy Indicator that reflects the existence of conducive environment for continued ICT investment and diffusion. It shows that further reforms are much needed for CEE countries to enter a second convergence phase in the coming decades. Copyright Springer-Verlag Berlin Heidelberg 2004

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File URL: http://hdl.handle.net/10.1007/s10368-004-0012-y
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Article provided by Springer in its journal International Economics and Economic Policy.

Volume (Year): 1 (2004)
Issue (Month): 2 (January)
Pages: 215-246

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Handle: RePEc:kap:iecepo:v:1:y:2004:i:2:p:215-246
DOI: 10.1007/s10368-004-0012-y
Contact details of provider: Web page: http://www.springer.com

Order Information: Web: http://www.springer.com/economics/international+economics/journal/10368/PS2

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  1. Kolodko, Grzegorz W., 2000. "From Shock to Therapy: The Political Economy of Postsocialist Transformation," OUP Catalogue, Oxford University Press, number 9780198297437, December.
  2. Abramovitz, Moses, 1986. "Catching Up, Forging Ahead, and Falling Behind," The Journal of Economic History, Cambridge University Press, vol. 46(02), pages 385-406, June.
  3. Marcin Piatkowski, 2003. "The Contribution of ICT Investment to Economic Growth and Labor Productivity in Poland 1995-2000," Development and Comp Systems 0308002, EconWPA.
  4. Francesco Daveri, 2002. "The New Economy in Europe, 1992--2001," Oxford Review of Economic Policy, Oxford University Press, vol. 18(3), pages 345-362.
  5. Piatkowski, Marcin, 2002. "The 'New Economy' and Economic Growth in Transition Economies," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  6. Marcin Piatkowski, 2004. "Does ICT Investment Matter for Growth and Labor Productivity in Transition Economies?," Development and Comp Systems 0402008, EconWPA.
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