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ICT capital and productivity growth

Author

Listed:
  • Hubert Strauss

    (European Investment Bank, Economics Department)

  • Besik Samkharadze

    (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

  • Hubert Strauss & Besik Samkharadze, 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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    Cited by:

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    2. Bakari, Sayef & Tiba, Sofien, 2020. "The Impact of Internet on Economic Growth in North Africa: New empirical and policy analysis," MPRA Paper 100609, University Library of Munich, Germany.
    3. Lange, Steffen & Pohl, Johanna & Santarius, Tilman, 2020. "Digitalization and energy consumption. Does ICT reduce energy demand?," Ecological Economics, Elsevier, vol. 176(C).
    4. Amat Adarov & Robert Stehrer, 2020. "New Productivity Drivers: Revisiting the Role of Digital Capital, FDI and Integration at Aggregate and Sectoral Levels," wiiw Working Papers 178, The Vienna Institute for International Economic Studies, wiiw.
    5. Briglauer, Wolfgang & Köppl-Turyna, Monika, 2021. "Die Auswirkung der Digitalisierung auf CO₂-Emissionen: Theoretische Einzeleffekte und empirische Abschätzung des Gesamteffekts," Policy Notes 46, EcoAustria – Institute for Economic Research.
    6. Zheng Yang Kuang & Qi Liang & Feng Yu & Wenxiu Hu & Tolassa Temesgen Hordofa & Nafeesa Mughal, 2025. "Rethinking digital finance and information and communication technology (ICT) capital impacts on environmental goods trade under carbon neutrality targets," Natural Resources Forum, Blackwell Publishing, vol. 49(3), pages 2579-2593, August.
    7. 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.
    8. Amat Adarov & David Klenert & Robert Marschinski & Robert Stehrer, 2020. "Productivity Drivers: Empirical Evidence on the Role of Digital Capital, FDI and Integration," JRC Research Reports JRC122068, Joint Research Centre.
    9. Sepehrdoust, Hamid & Zamani Shabkhaneh, Saber, 2018. "How knowledge base factors change natural resource curse to economic growth?," Technology in Society, Elsevier, vol. 54(C), pages 149-154.
    10. Reinhilde Veugelers, 2018. "Eco-systems for young digital innovators," The Journal of Technology Transfer, Springer, vol. 43(6), pages 1449-1465, December.
    11. Fabio Bacchini & Maria Elena Bontempi & Roberto Golinelli & Cecilia Jona-Lasinio, 2018. "Short- and long-run heterogeneous investment dynamics," Empirical Economics, Springer, vol. 54(2), pages 343-378, March.
    12. Temitope Wasiu Adamson & Folorunsho M. Ajide & M. O. Fatai & Olanike Idowu Ajayi, 2026. "Examining the trade openness-sectoral growth nexus in Sub-Saharan Africa. does ict matter? a static and dynamic analysis," SN Business & Economics, Springer, vol. 6(4), pages 1-35, April.
    13. Niebel, Thomas, 2018. "ICT and economic growth – Comparing developing, emerging and developed countries," World Development, Elsevier, vol. 104(C), pages 197-211.
    14. Zhiguang ZHANG & Haiqing HU & Winston T. LIN, 2019. "Analyzing the Impacts of Unobserved National Characteristics on Economic Performance of Information Technology based on a Partial Adjustment Approach With Dynamic and Variable Speed of Adjustment," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 128-142, March.
    15. Kurniady, Alvin, 2025. "New Production Function (which is Supported by Empirical Evidences) for an Economy with Deployed Self-Learning Technologies," MPRA Paper 127275, University Library of Munich, Germany.
    16. repec:ers:journl:v:xxiv:y:2021:i:special4:p:278-287 is not listed on IDEAS
    17. Baogui Xin & Yue Liu & Lei Xie, 2023. "Strategic data capital investment in a supply chain," Operations Management Research, Springer, vol. 16(4), pages 1925-1948, December.
    18. Ana Martins & Tiago Domingues & Catarina Branco, 2018. "The Determinants of TFP Growth in the Portuguese Service Sector," GEE Papers 0114, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Nov 2018.
    19. Schaal, Edouard & Taschereau-Dumouchel, Mathieu, 2023. "Herding through booms and busts," Journal of Economic Theory, Elsevier, vol. 210(C).
    20. Izabela Mlynarzewska- Borowiec, 2021. "Direct and Indirect Impact of ICT on EU’s Productivity Growth," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 2), pages 278-287.
    21. Leviäkangas, Pekka & Mok Paik, Seong & Moon, Sungkon, 2017. "Keeping up with the pace of digitization: The case of the Australian construction industry," Technology in Society, Elsevier, vol. 50(C), pages 33-43.
    22. 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.
    23. Feld, Lars P. & Schmidt, Christoph M. & Schnabel, Isabel & Truger, Achim & Wieland, Volker, 2019. "Den Strukturwandel meistern. Jahresgutachten 2019/20 [Dealing with Structural Change. Annual Report 2019/20]," Annual Economic Reports / Jahresgutachten, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung, volume 127, number 201920.
    24. Leviäkangas, Pekka, 2016. "Digitalisation of Finland's transport sector," Technology in Society, Elsevier, vol. 47(C), pages 1-15.
    25. Amat Adarov & David Klenert & Robert Marschinski & Robert Stehrer, 2022. "Productivity drivers: empirical evidence on the role of digital and intangible capital, FDI and integration," Applied Economics, Taylor & Francis Journals, vol. 54(48), pages 5515-5531, October.

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    More about this item

    Keywords

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    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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