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Information-communication technology impact on labor productivity growth of EU developing countries


  • Ljiljana Lovric

    () (University of Rijeka, Faculty of Economics, Rijeka, Croatia)


The aim of this study is to investigate the ICT impact on labor productivity growth of EU developing countries. Empirical studies of the role of ICT as one of the main determinants of productivity growth, for developing countries have produced disagreement. To help clear up the subject, this paper employs a Generalized Method of Moments (GMM) through a dynamic panel data approach on the sample of 25 European developed and developing countries over the period of 2001-2010. The results indicate a positive and significant impact of ICT on labor productivity growth in developed and developing countries, but the terms of impact in developing countries rely on human capital, a contribution of a higher educational level, advanced research qualifications and development activity. Comparing to developed countries, the growth accounting approach indicate that developing countries have similar relative ICT contribution to labor productivity growth, but their average growth rate of labor productivity is 6.8 times higher. The main conclusion is that education, especially of higher levels, is the critical factor of productivity and growth of EU developing countries and that must be taken as development policy implication in these countries.

Suggested Citation

  • Ljiljana Lovric, 2012. "Information-communication technology impact on labor productivity growth of EU developing countries," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics, vol. 30(2), pages 223-245.
  • Handle: RePEc:rfe:zbefri:v:30:y:2012:i:2:p:223-245

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    References listed on IDEAS

    1. Sanjeev Dewan & Kenneth L. Kraemer, 2000. "Information Technology and Productivity: Evidence from Country-Level Data," Management Science, INFORMS, vol. 46(4), pages 548-562, April.
    2. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 407-443.
    3. Bart van Ark & Marcin Piatkowski, 2004. "Productivity, innovation and ICT in Old and New Europe," International Economics and Economic Policy, Springer, vol. 1(2), pages 215-246, January.
    4. Marcin Piatkowski, 2003. "The Contribution of ICT Investment to Economic Growth and Labor Productivity in Poland 1995-2000," Development and Comp Systems 0308002, EconWPA.
    5. Sophia P Dimelis & Sotiris K Papaioannou, 2010. "FDI and ICT Effects on Productivity Growth: A Comparative Analysis of Developing and Developed Countries," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 22(1), pages 79-96, February.
    6. Jalava, Jukka & Pohjola, Matti, 2002. "Economic growth in the New Economy: evidence from advanced economies," Information Economics and Policy, Elsevier, vol. 14(2), pages 189-210, June.
    7. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Oxford University Press, vol. 58(2), pages 277-297.
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    More about this item


    ICT; labor productivity growth; EU; Generalized Method of Moments (GMM);

    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
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models


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