The Impact of Information and Communication Technology on the Productivity of the Canadian Transportation System: A Macroeconomic Approach for the Air and Rail Sectors
Productivity and ICT use in Canadian air and rail transportation have both increased significantly during the 1997-2010 period. Few efforts have been made, however, to quantify the link between these two variables. This report seeks to address this knowledge gap. It provides a detailed analysis of ICT investment, ICT capital, and productivity trends in Canadian air and rail transportation, comparing these trends to those seen in U.S. air and rail transportation. It thenevaluates the role of ICT as a productivity driver in these two sectors. Using industry-level data, we find that the standard neoclassical growth accounting framework does not appear to adequately capture the importance of ICT on air and rail productivity. Econometric approaches using the same data also failed to yield meaningful results, mainly due to the small number of observations, but also possibly due to the level of data aggregation. It is suggested that future work on the topic should focus on econometric approaches using firm-level data or case studies.
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