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In Search of An ICT Impact on TFP: Evidence from Industry Panel Data


  • Vecchi, Michela


  • Mary O'Mahony


This paper uses a new set of industry data for the US and the UK non-agricultural market economy, to provide new evidence on the impact of ICT on TFP. We compare the results from standard panel data techniques with newly developed dynamic panel data estimation methods. The traditional industry panel data analysis fails to find a significant impact of ICT on output/TFP growth. This paper argues that this is due to heterogeneity across industries, particularly in the time dimension. An alternative technique which allows the dynamic specification to vary across industries yields a positive and significant long-run impact of ICT on TFP.

Suggested Citation

  • Vecchi, Michela & Mary O'Mahony, 2003. "In Search of An ICT Impact on TFP: Evidence from Industry Panel Data," Royal Economic Society Annual Conference 2003 210, Royal Economic Society.
  • Handle: RePEc:ecj:ac2003:210

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    Cited by:

    1. Sang-Yong Tom Lee & Xiao Jia Guo, 2004. "Information and Communications Technology (ICT) and Spillover: A Panel Analysis," Econometric Society 2004 Far Eastern Meetings 722, Econometric Society.

    More about this item


    productivity; ICT capital; heterogeneous dynamic panels;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights


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