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Measuring “Indirect” Investments in ICT in OECD Countries

Author

Listed:
  • Gilbert Cette
  • Jimmy Lopez
  • Giorgio Presidente
  • Vincenzo Spiezia

Abstract

ICT components, such as microprocessors, may be embodied in other capital goods not recorded as ICT in National Accounts. We name ‘indirect ICT investment’ the value of embodied ICT components in non-ICT investment. The paper provides estimates of ‘indirect ICT investment’ based on detailed and unpublished Supply-Use tables (SUT) in 12 OECD countries: Australia, Belgium, Canada, Chile, Czech Republic, Denmark, France, Germany, Japan, Israel, Mexico, New Zealand, the United Kingdom, and the United States. Our main finding is that ICT investment appears significantly higher when considering its indirect component, the average increase being about 35%. The inclusion of indirect ICT investment, excluding software (for which firms’ expenditures are difficult to measure), changes significantly the relative position of countries with respect to the ICT intensity of their investments. The inclusion of software further increases indirect ICT investment but the increase is smaller (in percentage) than without this inclusion. A final result, but concerning only three countries, it that the diagnosis of a stabilisation, or even a decrease, of ICT investment in percentage of GDP or of total investment, observed from the beginning of the century, is not modified if we take into account the indirect ICT investment.

Suggested Citation

  • Gilbert Cette & Jimmy Lopez & Giorgio Presidente & Vincenzo Spiezia, 2018. "Measuring “Indirect” Investments in ICT in OECD Countries," Working papers 686, Banque de France.
  • Handle: RePEc:bfr:banfra:686
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    References listed on IDEAS

    as
    1. Aghion, Philippe & Askenazy, Philippe & Bourlès, Renaud & Cette, Gilbert & Dromel, Nicolas, 2009. "Education, market rigidities and growth," Economics Letters, Elsevier, vol. 102(1), pages 62-65, January.
    2. Dale W. Jorgenson & Mun S. Ho & Kevin J. Stiroh, 2008. "A Retrospective Look at the U.S. Productivity Growth Resurgence," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 3-24, Winter.
    3. P. Guerrieri & M. Luciani & V. Meliciani, 2011. "The determinants of investment in information and communication technologies," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 20(4), pages 387-403.
    4. David M. Byrne & Stephen D. Oliner & Daniel E. Sichel, 2013. "Is the Information Technology Revolution Over?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 25, pages 20-36, Spring.
    5. Robert J. Gordon, 2015. "Secular Stagnation: A Supply-Side View," American Economic Review, American Economic Association, vol. 105(5), pages 54-59, May.
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    7. Gilbert Cette & Jimmy Lopez, 2012. "ICT demand behaviour: an international comparison," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 21(4), pages 397-410, June.
    8. David M. Byrne & Stephen D. Oliner & Daniel E. Sichel, 2018. "How Fast are Semiconductor Prices Falling?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 64(3), pages 679-702, September.
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    More about this item

    Keywords

    Investment; ICT; Technology;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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