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Productivity drivers: empirical evidence on the role of digital and intangible capital, FDI and integration

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  • Amat Adarov
  • David Klenert
  • Robert Marschinski
  • Robert Stehrer

Abstract

We examine the drivers of labor productivity at aggregate and sectoral levels focusing on tangible and intangible ICT capital, FDI and global value chain participation. The analysis, based on a panel dataset of 18 EU countries, the US and Japan over the period 2000–2017, reveals an important role of ICT capital, especially intangible ICT capital embodied in software and databases, in driving labor productivity growth. Furthermore, backward global value chain participation is also positively associated with productivity. Contrary to expectations, we do not find evidence of a productivity-enhancing effect of foreign direct investment when controlling for phantom FDI related to special purpose entities.

Suggested Citation

  • Amat Adarov & David Klenert & Robert Marschinski & Robert Stehrer, 2022. "Productivity drivers: empirical evidence on the role of digital and intangible capital, FDI and integration," Applied Economics, Taylor & Francis Journals, vol. 54(48), pages 5515-5531, October.
    • Handle: RePEc:taf:applec:v:54:y:2022:i:48:p:5515-5531
    DOI: 10.1080/00036846.2022.2047598
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    4. Son, Sung Hyun & Kim, Young-Han, 2025. "Productivity spillover effects of participation in global value chains and FDI inflows," Economic Modelling, Elsevier, vol. 153(C).
    5. Cristiano Antonelli & Gianluca Orsatti & Guido Pialli, 2023. "The effects of the limited exhaustibility of knowledge on firm size and the direction of technological change," The Journal of Technology Transfer, Springer, vol. 48(4), pages 1359-1385, August.
    6. D. Dessì & R. Paci, 2023. "The impact of Global Value Chains participation on countries' productivity," Working Paper CRENoS 202305, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    7. Jeong, Dong Wook & Moon, Heewon & Jeong, Seol Mi & Moon, Chan Ju, 2024. "Digital capital accumulation in schools, teachers, and students and academic achievement: Cross-country evidence from the PISA 2018," International Journal of Educational Development, Elsevier, vol. 107(C).
    8. Amat Adarov & M. Ayhan Kose & Dana Vorisek, 2025. "Investment in Emerging and Developing Economies," CAMA Working Papers 2025-71, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.

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