How ICT Penetration Influences Productivity Growth: Evidence From 17 OECD Countries
Economic Development Quarterly: The Journal of American Economic Revitalization
Published online on March 05, 2013
Abstract
This article constructs an unbalanced panel data set based on a varying sample period of 1980-2004 for 17 OECD countries to analyze the impact of information and communication technology (ICT) on productivity growth. This article divides ICT capital stock into three categories, namely communication equipment, information technology (IT) equipment (hardware), and software, and uses them together with telecommunication demand and personal computer (PC) penetration rate as productivity-related explanatory variables. It then estimates a macro production function using micro models for ICT investment, telecommunication demand, and PC penetration. The estimation results suggest that the three categories of ICT capital stock, together with telephone and PC penetration rates, positively and significantly influence productivity growth in the selected high-income economies. Moreover, once the level of digitalization reaches 20%, it also provides a networked contribution to productivity growth.