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On the sectoral effects of digitalization based on new indicators by type of economic activity

Author

Listed:
  • Mironov, V.

    ("Development Center" Institute of the HSE University, Moscow, Russia)

  • Kuznetsov, A.

    ("Development Center" Institute of the HSE University, Moscow, Russia)

  • Konovalova, L.

    ("Development Center" Institute of the HSE University, Moscow, Russia)

Abstract

The article is devoted to the problem of quantifying the sectoral effects of digitalization of the economy. The experience in assessing the impact of digital transformation on economic growth is described. A methodology for assessing the sectoral effects of digitalization was proposed and tested on a panel of industrialized economies. It is based on the modified OECD approach, which was previously used by international experts and the Ministry of Economic Development of Russia at the macro level. This approach assumes econometric estimates based on panel regressions of the impact of the dynamics of economic policy indicators (including digitalization) on the components of a specially disaggregated production function. The key advantage of this approach is that it represents GDP growth (in our approach, sectoral output) as the sum of separate and independent components of the supply (capital intensity of output, labor force involvement and total factor productivity ("TFP")). This approach allows you to first assess the effect of digitalization on each component separately, and then, integrating the estimates obtained with certain weights and summing up with the contribution of "TFP", determine the overall impact of digitalization on the output growth. The transition to the sectoral level in assessing effects was made possible by the recent inclusion of sectoral digitalization indicators in the EU KLEMS database for 40 types of economic activity of 30 countries in the period 1995-2019. The preliminary estimates of the impact of digitalization on the growth of branches of economy output obtained during testing (for 10 selected sectors) allow us to note a serious differentiation of effects by branches of economy, as well as to point out some opportunities to enhance the effectiveness of economic policy in Russia taking into account some characteristics of the structure of its economy.

Suggested Citation

  • Mironov, V. & Kuznetsov, A. & Konovalova, L., 2024. "On the sectoral effects of digitalization based on new indicators by type of economic activity," Journal of the New Economic Association, New Economic Association, vol. 62(1), pages 143-179.
    • Handle: RePEc:nea:journl:y:2024:i:62:p:143-170
    DOI: 10.31737/22212264_2024_1_143-170
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    More about this item

    Keywords

    digital transformation; economic structure; advanced technologies; production function; economic policy;
    All these keywords.

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • E66 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General Outlook and Conditions
    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling

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