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Information Technology Investment and Productivity Growth in Korea

Author

Listed:
  • Jong-Il Kim

    (Dongguk University)

Abstract

This study analyzes the effect of IT investment on productivity growth based on Korean firm level data in 1996-2000. Empirical findings support the hypothesis that IT investment enhanced productivity by increasing value-added and saving ordinary capital and labor. Installed IT capital is estimated to be valued in the financial market much higher than the acquisition price. It implies that IT investment accompanies creation of unmeasurable intangible assets. Taking this into account, the contribution of IT investment to economic growth could be greater than suggested by conventional growth accounting. Strong structural reform after recent economic crisis might have helped IT investment to have a substantial impact on firm performance.

Suggested Citation

  • Jong-Il Kim, 2004. "Information Technology Investment and Productivity Growth in Korea," Korean Economic Review, Korean Economic Association, vol. 20, pages 95-113.
    • Handle: RePEc:kea:keappr:ker-20040630-20-1-05
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    File URL: http://keapaper.kea.ne.kr/RePEc/kea/keappr/KER-20040630-20-1-05.pdf
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    More about this item

    Keywords

    Information Technology; Total Factor Productivity; Intangible Capital; Growth Accounting;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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