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Productivity and ICT: a review of the evidence

  • Mirko Draca
  • Raffaella Sadun
  • John Van Reenen

We survey the micro and macro literature on the impact of Information and Communication Technologies (ICTs) on productivity. The “Solow Paradox” of the absence of an impact of ICT on productivity no longer holds, if it ever did. Both growth accounting and econometric evidence suggest an important role for ICTs in accounting for productivity. In fact, the empirical estimates suggest a much larger impact of ICT on productivity than would be expected from the standard neoclassical model that we focus on. We discuss the various explanations for these results, including the popular notion of complementary organizational capital. Finally, we offer suggestions for where the literature needs to go.

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File URL: http://eprints.lse.ac.uk/4561/
File Function: Open access version.
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Paper provided by London School of Economics and Political Science, LSE Library in its series LSE Research Online Documents on Economics with number 4561.

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Length: 76 pages
Date of creation: Aug 2006
Date of revision:
Handle: RePEc:ehl:lserod:4561
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Web page: http://www.lse.ac.uk/

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