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ICT investments and productivity: Measuring the contribution of ICTS to growth

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  • Vincenzo Spiezia

Abstract

This study uses an econometric approach to estimate the contribution of three types of ICT investments (computer, software and communication) in 26 industries (the whole business sector) in 18 OECD countries over 1995-2007, based on the EU KLEMS Database. The estimated contribution of ICT investments to value added growth in the business sector varies from 1.0% a year in Australia to 0.4% a year in Japan. In one-third of the countries considered, the contribution of ICT investment was bigger or equal to the contribution of non-ICT investments. In most countries, computing equipment provided the largest contribution and accounted for over 50% of the overall ICT contribution. The only exceptions are Finland, where investments in communication equipment exceeded those in computing equipment, and Japan, where software was the most dynamic component of ICT investments. ICT producing industries account for no less than two-thirds of total factor productivity (TFP) growth in Germany, Slovenia and the United Kingdom, about 60% in the United States and just below 50% in France and the Netherlands. In Denmark, the Czech Republic and Italy, TFP increased in the ICT producing industries whereas it decreased for the total business sector. JEL classification: O47, E23, E22. Keywords: Growth accounting, ICT, GMM, EU KLEMS.

Suggested Citation

  • Vincenzo Spiezia, 2012. "ICT investments and productivity: Measuring the contribution of ICTS to growth," OECD Journal: Economic Studies, OECD Publishing, vol. 2012(1), pages 199-211.
    • Handle: RePEc:oec:ecokac:5k8xdhj4tv0t
    DOI: 10.1787/eco_studies-2012-5k8xdhj4tv0t
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    Cited by:

    1. Jonathan Gimmy Leo, 2022. "Impact of Information and Communication Technology on Public Sector Productivity Growth in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(12), pages 14-21, December.
    2. Zachary Parolin, 2019. "Automation and Occupational Wage Trends: What Role for Unions and Collective Bargaining?," LIS Working papers 767, LIS Cross-National Data Center in Luxembourg.
    3. 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.
    4. Stéphane CIRIANI & Pascal PERIN, 2015. "Current Perspectives on the Employment Impact of Digital Technologies," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(100), pages 145-163, 4th quart.
    5. Jonathan Barr & Peter Foltin & Jianmin Tang, 2023. "Recent Productivity Trends in Canada: Navigating the Twin Transitions of Green and Digitalization," International Productivity Monitor, Centre for the Study of Living Standards, vol. 45, pages 93-119, Fall.
    6. Hope, David & Martelli, Angelo, 2019. "The transition to the knowledge economy, labor market institutions, and income inequality in advanced democracies," LSE Research Online Documents on Economics 100382, London School of Economics and Political Science, LSE Library.
    7. Gilbert Cette & Aurélien Devillard & Vincenzo Spiezia, 2022. "Growth Factors in Developed Countries: A 1960–2019 Growth Accounting Decomposition," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 64(2), pages 159-185, June.
    8. Kim, Keungoui & Bounfour, Ahmed & Nonnis, Alberto & Özaygen, Altay, 2021. "Measuring ICT externalities and their contribution to productivity: A bilateral trade based approach," Telecommunications Policy, Elsevier, vol. 45(2).
    9. De Santis, R. & Esposito, P. & Lasinio, C. Jona, 2021. "Environmental regulation and productivity growth: Main policy challenges," International Economics, Elsevier, vol. 165(C), pages 264-277.
    10. Amy Huong Yong Jing & Rossazana Ab-Rahim, 2020. "Information and Communication Technology (ICT) and Economic Growth in ASEAN-5 Countries," Journal of Public Administration and Governance, Macrothink Institute, vol. 10(2), pages 2033-2033, December.
    11. Eman Ahmed Hashem, 2015. "The Impact of ICT investment on Human Development," International Journal of Management Sciences, Research Academy of Social Sciences, vol. 5(1), pages 111-124.
    12. Abeliansky, Ana L. & Hilbert, Martin, 2017. "Digital technology and international trade: Is it the quantity of subscriptions or the quality of data speed that matters?," Telecommunications Policy, Elsevier, vol. 41(1), pages 35-48.
    13. Li, Tiebei & Dodson, Jago, 2020. "Job growth, accessibility, and changing commuting burden of employment centres in Melbourne," Journal of Transport Geography, Elsevier, vol. 88(C).
    14. Walter Paternesi Meloni & Antonella Stirati, 2023. "The decoupling between labour compensation and productivity in high‐income countries: Why is the nexus broken?," British Journal of Industrial Relations, London School of Economics, vol. 61(2), pages 425-463, June.
    15. Ionel Bostan, 2022. "Electronic Surveillance in Court Proceedings and in the Execution of Criminal Penalties: Legislative and Logistical Steps Regarding Operationalising the Electronic Monitoring Information System (EMIS)," Laws, MDPI, vol. 11(4), pages 1-25, July.
    16. Ajoy Ketan Sarangi & Rudra Prakash Pradhan, 2020. "ICT infrastructure and economic growth: a critical assessment and some policy implications," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 47(4), pages 363-383, December.
    17. Federico Biagi, 2013. "ICT and Productivity: A Review of the Literature," JRC Working Papers on Digital Economy 2013-09, Joint Research Centre.
    18. Debbra Toria Nipo & Jaratin Lily & Sidah Idris & Saizal Pinjaman & Imbarine Bujang, 2023. "Information and Communication Technology (ICT) on Economic Growth in Asia: A Panel Data Analysis," International Journal of Business and Management, Canadian Center of Science and Education, vol. 17(12), pages 1-18, February.
    19. Izabela Mlynarzewska- Borowiec, 2021. "Direct and Indirect Impact of ICT on EU’s Productivity Growth," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 4), pages 278-287.

    More about this item

    Keywords

    growth accounting; ict; gmm; eu klems.;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity

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