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Aggregate Total Factor Productivity and Resource Reallocation Effect of ICT Sectors in Korea: A Comparison with the USA, Japan and EU7

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  • Keun Hee Rhee, Hak K. Pyo

    (Korea Productivity Center, Seoul National University)

Abstract

The paper estimates total factor productivity and resource reallocation effect in ICT sectors from the cross-country data of the USA, Japan, EU7 and Korea. The source of economic growth has shifted from the non-ICT sector to the ICT sector after the ICT boom in the USA, Japan, EU7, and Korea. We find the contribution of ICT-producing sector to value-added growth and TFP growth has slowed down, but that of the ICT-using sector has grown since the middle of 1990s. In addition the reallocation effects of capital are outweighed in ICT-using service sectors such as trade and finance, and the reallocation effects of labor tend to be higher in non-ICT sectors, ICT-producing service, and ICTproducing manufacturing sectors, among others.

Suggested Citation

  • Keun Hee Rhee, Hak K. Pyo, 2012. "Aggregate Total Factor Productivity and Resource Reallocation Effect of ICT Sectors in Korea: A Comparison with the USA, Japan and EU7," Korean Economic Review, Korean Economic Association, vol. 28, pages 189-219.
    • Handle: RePEc:kea:keappr:ker-20121231-28-2-04
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    References listed on IDEAS

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    1. Kyoji Fukao & Tsutomu Miyagawa & Miho Takizawa, 2007. "Productivity Growth and Resource Reallocation in Japan," Hi-Stat Discussion Paper Series d07-224, Institute of Economic Research, Hitotsubashi University.
    2. Oliner, Stephen D. & Sichel, Daniel E. & Stiroh, Kevin J., 2008. "Explaining a productive decade," Journal of Policy Modeling, Elsevier, vol. 30(4), pages 633-673.
    3. repec:dgr:rugccs:200311 is not listed on IDEAS
    4. Ark, Bart van & Inklaar, Robert & McGuckin, Robert H., 2003. "ICT and productivity in Europe and the United States," CCSO Working Papers 200311, University of Groningen, CCSO Centre for Economic Research.
    5. Pyo, Hak K. & Ha, Bongchan, 2007. "A Test of Separability and Random Effects in Production Function with Decomposed IT Capital," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 48(1), pages 67-81, June.
    6. Kevin J. Stiroh, 2002. "Information Technology and the U.S. Productivity Revival: What Do the Industry Data Say?," American Economic Review, American Economic Association, vol. 92(5), pages 1559-1576, December.
    7. Kyoji Fukao & Tsutomu Miyagawa & Hak Kil Pyo & Keun Hee Rhee, 2012. "Estimates of Total Factor Productivity, the Contribution of ICT, and Resource Reallocation Effects in Japan and Korea," Chapters, in: Matilde Mas & Robert Stehrer (ed.), Industrial Productivity in Europe, chapter 9, Edward Elgar Publishing.
    8. Matilde Mas & Robert Stehrer (ed.), 2012. "Industrial Productivity in Europe," Books, Edward Elgar Publishing, number 14369.
    9. Dirk Pilat & Franck Lee & Bart van Ark, 2003. "Production and Use of ICT: A Sectoral Perspective on Productivity Growth in the OECD Area," OECD Economic Studies, OECD Publishing, vol. 2002(2), pages 47-78.
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    Cited by:

    1. Hyunbae Chun & M. Ishaq Nadiri, 2016. "Intangible Investment and Changing Sources of Growth in Korea," The Japanese Economic Review, Japanese Economic Association, vol. 67(1), pages 50-76, March.

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    More about this item

    Keywords

    Total Factor Productivity; Aggregation; Resource Reallocation;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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