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ICT and Productivity in Europe and the United States Where Do the Differences Come From?

Listed author(s):
  • Bart van Ark
  • Robert Inklaar
  • Robert H. McGuckin

In this paper we analyse labour productivity growth in 51 industries in European countries and the United States. Using shift-share techniques we identify the industries in which the U.S. is leading most strongly. With a detailed decomposition analysis we identify whether the sources of the U.S. advantage are due to faster productivity growth, higher industry productivity levels relative to the country aggregate, different employment shares or faster change in employment shares of rapidly growing industries. The results show that U.S. productivity has grown faster than in the EU because of a larger employment share in the ICT producing sector and faster productivity growth in services industries that make intensive use of ICT. Wholesale and retail trade and the financial securities industry account for most of the difference in aggregate productivity growth between the EU and the U.S. (JEL N10, O47, O57)

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File URL: http://hdl.handle.net/10.1093/cesifo/49.3.295
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Article provided by CESifo in its journal CESifo Economic Studies.

Volume (Year): 49 (2003)
Issue (Month): 3 ()
Pages: 295-318

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Handle: RePEc:oup:cesifo:v:49:y:2003:i:3:p:295-318.
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  1. Bresnahan, Timothy F. & Trajtenberg, M., 1995. "General purpose technologies 'Engines of growth'?," Journal of Econometrics, Elsevier, vol. 65(1), pages 83-108, January.
  2. Paul Schreyer, 2000. "The Contribution of Information and Communication Technology to Output Growth: A Study of the G7 Countries," OECD Science, Technology and Industry Working Papers 2000/2, OECD Publishing.
  3. C.J. Krizan & John Haltiwanger & Lucia Foster, 2002. "The Link Between Aggregate and Micro Productivity Growth: Evidence from Retail Trade," Working Papers 02-18, Center for Economic Studies, U.S. Census Bureau.
  4. Dale W. Jorgenson, 2001. "Information Technology and the U.S. Economy," American Economic Review, American Economic Association, vol. 91(1), pages 1-32, March.
  5. Erik Brynjolfsson & Lorin M. Hitt, 2003. "Computing Productivity: Firm-Level Evidence," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 793-808, November.
  6. Oliner, Stephen D. & Sichel, Daniel E., 2003. "Information technology and productivity: where are we now and where are we going?," Journal of Policy Modeling, Elsevier, vol. 25(5), pages 477-503, July.
  7. William D. Nordhaus, 2001. "The Progress of Computing," Cowles Foundation Discussion Papers 1324, Cowles Foundation for Research in Economics, Yale University.
  8. Erik Brynjolfsson & Lorin M. Hitt, 2000. "Beyond Computation: Information Technology, Organizational Transformation and Business Performance," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 23-48, Fall.
  9. repec:dgr:rugccs:200311 is not listed on IDEAS
  10. Ark, Bart van & Inklaar, Robert & McGuckin, Robert H., 2003. "ICT and productivity in Europe and the United States," CCSO Working Papers 200311, University of Groningen, CCSO Centre for Economic Research.
  11. 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.
  12. McGuckin, Robert H & Stiroh, Kevin J, 2001. "Do Computers Make Output Harder to Measure?," The Journal of Technology Transfer, Springer, vol. 26(4), pages 295-321, October.
  13. Ralph Kozlow, 2000. "International Accounts Data Needs: Plans, Progress, and Priorities," BEA Papers 0009, Bureau of Economic Analysis.
  14. Schreyer, Paul, 2002. "Computer Price Indices and International Growth and Productivity Comparisons," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(1), pages 15-31, March.
  15. repec:rus:hseeco:15966 is not listed on IDEAS
  16. Alessandra Colecchia & Paul Schreyer, 2002. "ICT Investment and Economic Growth in the 1990s: Is the United States a Unique Case? A Comparative Study of Nine OECD Countries," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(2), pages 408-442, April.
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