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Impact of International Information Technology Transfer on National Productivity

Author

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  • Jungsoo Park

    (School of Economics, Sogang University, 1 Shinsu-dong, Mapo-gu, Seoul, Korea 121-742)

  • Seung Kyoon Shin

    (College of Business Administration, University of Rhode Island, 7 Lippitt Road, Kingston, Rhode Island 02881-0802)

  • G. Lawrence Sanders

    (Department of Management Science and Systems, School of Management, State University of New York at Buffalo, Buffalo, New York 14260-4000)

Abstract

Researchers have widely postulated that the adoption of information technology (IT) products enhances global competitiveness and production efficiency as successful technological innovation replaces and improves traditional inputs and modes of production. This study suggests that when IT products are traded across borders, IT investment in an economy has a positive influence on the productivity of its import partner country. We provide empirical evidence for the positive effect of global IT diffusion on productivity through international trading of IT products. The results show a positive effect of foreign IT transfer on the recipient country’s productivity. In addition, we find that the effect of transferred IT is only significant when the source country is an IT-intensive or hi-tech export country. The results and implications are robust, even controlling for other important factors such as openness, innovative capacity, and IT infrastructure in addition to the transferred IT. Finally, a panel cointegration test---a recently developed advanced econometric method---is used to address the common problems of spurious relations that arise in regressions with nonstationary time-series data.

Suggested Citation

  • Jungsoo Park & Seung Kyoon Shin & G. Lawrence Sanders, 2007. "Impact of International Information Technology Transfer on National Productivity," Information Systems Research, INFORMS, vol. 18(1), pages 86-102, March.
    • Handle: RePEc:inm:orisre:v:18:y:2007:i:1:p:86-102
    DOI: 10.1287/isre.1070.0116
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