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Do ICT spillovers matter; evidence from Dutch firm-level data

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  • Henry van der Wiel

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  • George van Leeuwen

Abstract

This paper presents an empirical analysis of the contribution of Information Communication and Technology (ICT) to labour productivity growth in the 1990s, using an extensive panel of firm-level data for Dutch market services. We estimate enhanced production function models that include ICT spillovers as well as innovation as a component of TFP (growth). Additionally, we compare the results of this approach with the growth-accounting approach carried out at the firm level. Doing so, we attempt to reconcile the different pieces of empirical evidence regarding the contribution of ICT to productivity growth reported in the literature so far. It is shown that, after accounting for ICT spillovers, the relatively high estimated elasticities of own ICT capital at the firm level are substantially reduced. So, they are more consistent with findings for aggregated levels reported in growth-accounting studies. Nevertheless, the latter studies do not disentangle the causes of TFP-growth into ultimate causes like productivity growth arising from ICT spillovers. Our results underline that the contribution of those spillovers in the years of the ICT boom was probably more substantial than the contribution of ICT capital deepening.

Suggested Citation

  • Henry van der Wiel & George van Leeuwen, 2003. "Do ICT spillovers matter; evidence from Dutch firm-level data," CPB Discussion Paper 26, CPB Netherlands Bureau for Economic Policy Analysis.
  • Handle: RePEc:cpb:discus:26
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    References listed on IDEAS

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    1. Klette, Tor Jakob, 1999. "Market Power, Scale Economies and Productivity: Estimates from a Panel of Establishment Data," Journal of Industrial Economics, Wiley Blackwell, vol. 47(4), pages 451-476, December.
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    7. Ark, Bart van & Inklaar, Robert & McGuckin, Robert H., 2003. "ICT and productivity in Europe and the United States," CCSO Working Papers 200311, University of Groningen, CCSO Centre for Economic Research.
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    9. Henk Kox, 2002. "Growth challenges for the Dutch business services industry; international comparison and policy issues," CPB Special Publication 40, CPB Netherlands Bureau for Economic Policy Analysis.
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    Cited by:

    1. Machiel van Dijk & Bert Minne & Machiel Mulder & Henry van der Wiel & J. Poort, 2005. "Do market failures hamper the perspectives of broadband?," CPB Document 102, CPB Netherlands Bureau for Economic Policy Analysis.
    2. Otto Raspe & Frank Van Oort, 2006. "The Knowledge Economy and Urban Economic Growth," European Planning Studies, Taylor & Francis Journals, pages 1209-1234.
    3. Chantal Kegels & Michael Peneder & Henry van der Wiel, 2012. "Productivity Performance in Three Small European Countries: Austria, Belgium and the Netherlands," Chapters,in: Industrial Productivity in Europe, chapter 5 Edward Elgar Publishing.
    4. Bernadette Biatour & Michel Dumont & Chantal Kegels, 2011. "Working Paper 07-11 - The determinants of industry-level total factor productivity in Belgium," Working Papers 1107, Federal Planning Bureau, Belgium.
    5. Joseph Plasmans, 2011. "Productivity and Competition from a Global Point of View," Chapters,in: The Handbook of Globalisation, Second Edition, chapter 14 Edward Elgar Publishing.
    6. Ana Rincon & Michela VECCHI & Francesco VENTURINI, 2012. "ICT spillovers, absorptive capacity and productivity performance," Quaderni del Dipartimento di Economia, Finanza e Statistica 103/2012, Università di Perugia, Dipartimento Economia.

    More about this item

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L80 - Industrial Organization - - Industry Studies: Services - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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