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ICT capital and productivity growth

Author

Listed:
  • Strauss, Hubert

    () (European Investment Bank, Economics Department)

  • Samkharadze, Besik

    () (Université Catholique de Louvain)

Abstract

ICT capital is an important driver of productivity growth. Using data from the EUKLEMS growth accounts, we show that ICT has made smaller contributions to labour productivity growth in the EU-15 than in the US, both at the macro level and at the level of individual sectors. At the same time, progress in productive efficiency – as measured by total factor productivity (TFP) growth – sharply declined in Europe and has remained weak since the mid-1990s whereas the US has seen acceleration in TFP. The near-stagnant TFP in market services in the EU-15 is particularly worrying. In both the EU-15 and the US, the growth contributions from ICT are found to be smaller than those from TFP. However, our empirical analysis suggests that the full effect of ICT capital on productivity is larger than what the growth accounts suggest because many ICT benefits occur with a delay.

Suggested Citation

  • Strauss, Hubert & Samkharadze, Besik, 2011. "ICT capital and productivity growth," EIB Papers 6/2011, European Investment Bank, Economics Department.
  • Handle: RePEc:ris:eibpap:2011_006
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    References listed on IDEAS

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    Cited by:

    1. Edgar Ortiz & Miriam Sosa & Héctor Díaz, 2015. "Educational Levels and the Impact of ICT on Economic Growth: Evidence of a Cointegrated Panel," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 5(9), pages 15-30, September.
    2. repec:spr:empeco:v:54:y:2018:i:2:d:10.1007_s00181-016-1211-4 is not listed on IDEAS
    3. Niebel, Thomas, 2018. "ICT and economic growth – Comparing developing, emerging and developed countries," World Development, Elsevier, vol. 104(C), pages 197-211.
    4. Raquel Ortega-Argilés, 2012. "The Transatlantic Productivity Gap: A Survey Of The Main Causes," Journal of Economic Surveys, Wiley Blackwell, vol. 26(3), pages 395-419, July.

    More about this item

    Keywords

    European Union; growth accounting; ICT; total factor productivity; System GMM;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General

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