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Information Technology, Research & Development, or Both? What Really Drives A Nation's Productivity

  • Francesco VENTURINI


    (Universita' Politecnica delle Marche, Dipartimento di Economia)

To what extent are the productivity spillovers of information technology related to R&D activity? Do these factors distinctly affect economic growth, or does the IT impact merely reflect the embodiment of R&D-driven technical progress? Based on country-level data, this work shows that both forms of technically advanced capital (R&D and IT) matter for long-run productivity growth. We control for either the domestic specialization in digital productions or import penetration of high-tech goods. In any case, the national endowment of IT assets emerges as a robust source of spillovers. It is also shown that the R&D base of the domestic producers of IT goods is a fundamental driver of productivity for the industrialized countries. In terms of TFP gains, a low degree of industry specialization in information technology can hardly be compensated by a country's trade openness, ie importing R&D-intensive (IT) goods from abroad. This contrasts to what occurs for less advanced productions.

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Paper provided by Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali in its series Working Papers with number 321.

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Length: 33
Date of creation: May 2008
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Handle: RePEc:anc:wpaper:321
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