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The dynamics of ICT adaptation and the productivity gaps across advanced nations

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  • Tero Kuusi

Abstract

This paper concerns the relationship between ICT and the emerged productivity gaps across the advanced nations. It is shown theoretically that the standard output elasticity estimation methods may lead to underestimate the role of ICT in generating productivity gaps, when there is a trade-off between speed of introducing technologies and the need to assimilate those as reflected by the inefficiency with which the new technology is used. The trade-off generates leader-follower patterns and mutes the relationship between productivity and ICT. The paper tests several economic hypotheses derived from the theory of technology adaptation using data envelope analysis, a novel growth factorization, and a range of panel econometrics techniques. It finds new evidence for the importance of ICT capital. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Tero Kuusi, 2015. "The dynamics of ICT adaptation and the productivity gaps across advanced nations," Journal of Productivity Analysis, Springer, vol. 44(2), pages 175-188, October.
    • Handle: RePEc:kap:jproda:v:44:y:2015:i:2:p:175-188
    DOI: 10.1007/s11123-014-0422-y
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    More about this item

    Keywords

    MFP; ICT capital; Growth differentials; O3; O4; C2; C4;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics

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