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Information And Communication Technology And New Zealand'S Productivity Malaise: An Industry-Level Study

Author

Listed:
  • Engelbrecht, Hans-Jurgen
  • Xayavong, Vilaphonh

Abstract

This paper examines the link between information and communication technology (ICT) and New Zealand's labour productivity (LP) growth in 29 industries over the period 1988-2003, and over relevant sub-periods. After deriving an ICT intensity index in order to classify industries into 'more ICT intensive' and 'less ICT intensive', we compare LP growth rates for these two industry groupings. Further, we employ dummy variable regression models, including difference-in-difference models, to more formally test the relationship between ICT intensity and LP growth. The results prove to be sensitive to the time period specified. When breaks in the data series are taken into account, there seems to be support for the view that LP growth of more ICT intensive industries has improved over time relative to that of less ICT intensive industries, even though overall LP growth was weak. To put it differently, the restrained New Zealand LP performance apparent from our data seems to have been due mainly to the decline in LP growth of less ICT intensive industries. Our results illustrate that lack of overall productivity growth per se is not necessarily evidence against the beneficial productivity impacts of ICT. Rather, the proper comparison is that between the productivity performance of more ICT intensive versus less ICT intensive industries. However, our results can only be taken as suggestive, given the fact that ICT is but one of the determinants of LP, and given the many inherent measurement problems.

Suggested Citation

  • Engelbrecht, Hans-Jurgen & Xayavong, Vilaphonh, 2004. "Information And Communication Technology And New Zealand'S Productivity Malaise: An Industry-Level Study," Discussion Papers 23698, Massey University, Department of Applied and International Economics.
  • Handle: RePEc:ags:masddp:23698
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    File URL: http://purl.umn.edu/23698
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    References listed on IDEAS

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    1. David, Paul A, 1990. "The Dynamo and the Computer: An Historical Perspective on the Modern Productivity Paradox," American Economic Review, American Economic Association, vol. 80(2), pages 355-361, May.
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    3. Matthew D Shapiro, 2003. "Has the rate of economic growth changed? Evidence and lessons for public policy," Reserve Bank of New Zealand Discussion Paper Series DP2003/07, Reserve Bank of New Zealand.
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    5. W A Razzak, 2004. "Towards Building A New Consensus About New Zealand’s Productivity," GE, Growth, Math methods 0405002, EconWPA.
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    10. repec:dgr:rugggd:200260 is not listed on IDEAS
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    Cited by:

    1. Engelbrecht, Hans-Jurgen & Xayavong, Vilaphonh, 2006. "ICT intensity and New Zealand's productivity malaise: Is the glass half empty or half full?," Information Economics and Policy, Elsevier, vol. 18(1), pages 24-42, March.

    More about this item

    Keywords

    Information and Communication Technology; Labour Productivity Growth; ICT Intensive Industries; New Zealand.; Productivity Analysis; O47; O50;

    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
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General

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