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The contribution of ICT to economic activity: a growth accounting exercise with Spanish firm-level data

Author

Listed:
  • Ignacio Hernando

    () (Banco de España)

  • Soledad Núñez

    (Banco de España)

Abstract

This paper uses a well-established growth accounting framework to measure the contribution of ICT goods (considered as capital inputs) to output and labour productivity growth in the Spanish economy. We apply this framework to a sample of around 1300 Spanish firms per year over the period 1991-2000. The use of micro-level data is especially useful for the purpose in hand. Firstly, our database provides detailed breakdowns of capital. This helps mitigate the usual mismeasurement problems in obtaining capital stocks. Secondly, by avoiding the usual availability lags associated with the use of aggregate data, we can focus on a more recent period. The main findings may be summarised as follows. 1) The use of ICT as a capital input has made a positive and, relative to its cost share, significant contribution to output and productivity growth. 2) This contribution was higher in the second half of the 1990s. For this period, we estimate that the use of ICT inputs accounted for nearly one-fourth of labour productivity growth. 3) At a sectoral level, we find that there is a general rise in the share of ICT in total capital and a general reduction in ICT cost shares, driven by the sharp downward trend in the prices of ICT products. However, the contribution of ICT inputs displays a degree of heterogeneity across sectors, owing to the disparity of sectoral accumulation rates of ICT inputs. Finally, results at the firm level exhibit a notable heterogeneity, although a majority of firms have experienced an increase in the ICT capital growth rates and in the ICT contribution to growth.

Suggested Citation

  • Ignacio Hernando & Soledad Núñez, 2002. "The contribution of ICT to economic activity: a growth accounting exercise with Spanish firm-level data," Working Papers 0203, Banco de España;Working Papers Homepage.
  • Handle: RePEc:bde:wpaper:0203
    as

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    File URL: http://www.bde.es/f/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosTrabajo/02/Fic/dt0203e.pdf
    File Function: First version, January 2002
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    References listed on IDEAS

    as
    1. Stephen D. Oliner & Daniel E. Sichel, 2000. "The resurgence of growth in the late 1990s: is information technology the story?," Proceedings, Federal Reserve Bank of San Francisco.
    2. Dale W. Jorgenson & Kevin J. Stiroh, 2000. "Raising the Speed Limit: U.S. Economic Growth in the Information Age," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 31(1), pages 125-236.
    3. Erik Brynjolfsson & Lorin Hitt, 1996. "Paradox Lost? Firm-Level Evidence on the Returns to Information Systems Spending," Management Science, INFORMS, vol. 42(4), pages 541-558, April.
    4. 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.
    5. Robert H. McGuckin, 2002. "Computers and Productivity: are Aggregation Effects Important?," Economic Inquiry, Western Economic Association International, vol. 40(1), pages 42-59, January.
    6. 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.
    7. Alessandra Colecchia & Paul Schreyer, 2001. "ICT Investment and Economic Growth in the 1990s: Is the United States a Unique Case? A Comparative Study of Nine OECD Countries," OECD Science, Technology and Industry Working Papers 2001/7, OECD Publishing.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Samoilenko, Sergey & Osei-Bryson, Kweku-Muata, 2008. "An exploration of the effects of the interaction between ICT and labor force on economic growth in transition economies," International Journal of Production Economics, Elsevier, vol. 115(2), pages 471-481, October.
    2. Ignacio Hernando & Soledad Núñez, 2004. "The contribution of ICT to economic activity: a growth accounting exercise with Spanish firm-level data," Investigaciones Economicas, Fundación SEPI, vol. 28(2), pages 315-348, May.

    More about this item

    Keywords

    Information and Communication Technologies; Growth Accounting; Technological Change;

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment

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