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Investment in ICTs: an empirical analysis

Author

Listed:
  • Gilbert Cette

    (Centre de recherche de la Banque de France - Banque de France)

  • Jimmy Lopez

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

  • Pierre-Alexandre Noual

    (Centre de recherche de la Banque de France - Banque de France)

Abstract

This paper addresses the question of whether differences in the price elasticity of demand for Information and Communication Technologies (ICTs) could explain why Europe lags behind the USA in terms of ICT diffusion. Annual macroeconomic data covering the period 1975–2001 is used and five countries considered: France, Germany, the Netherlands, the UK and the USA. Europe's lag in ICT diffusion does not appear to be linked to crosscountry differences in the price elasticity of demand for ICT products. The results suggest that at least part of the gap in ICT diffusion should be ascribed to more structural crosscountry differences. The estimated value of the price-elasticity of computer hardware and software is generally lower than À1 which, given the decline in the relative price of these products, explains the increase in their share of investment expenditure and GDP. This situation is characteristic of a diffusion stage and is necessarily temporary.

Suggested Citation

  • Gilbert Cette & Jimmy Lopez & Pierre-Alexandre Noual, 2005. "Investment in ICTs: an empirical analysis," Post-Print hal-01247384, HAL.
    • Handle: RePEc:hal:journl:hal-01247384
    DOI: 10.1080/13504850500042280
    Note: View the original document on HAL open archive server: https://hal.science/hal-01247384
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    References listed on IDEAS

    as
    1. Bart van Ark & Robert Inklaar & Robert H. McGuckin, 2002. "'Changing Gear' - Productivity, ICT and Services Industries: Europe and the United States," Economics Program Working Papers 02-02, The Conference Board, Economics Program.
    2. Gust, Christopher & Marquez, Jaime, 2004. "International comparisons of productivity growth: the role of information technology and regulatory practices," Labour Economics, Elsevier, vol. 11(1), pages 33-58, February.
    3. Oliner, Stephen D. & Sichel, Daniel E., 2003. "Information technology and productivity: where are we now and where are we going?," Journal of Policy Modeling, Elsevier, vol. 25(5), pages 477-503, July.
    4. Dale W. Jorgenson, 2007. "Information Technology and the G7 Economies," NBER Chapters, in: Hard-to-Measure Goods and Services: Essays in Honor of Zvi Griliches, pages 325-350, National Bureau of Economic Research, Inc.
    5. Gilbert Cette & Pierre-Alexandre Noual, 2003. "L’investissement en TIC aux Etat-Unis et dans quelques pays européens," Working Papers 2003-03, CEPII research center.
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    Cited by:

    1. Pierre-Alain Muet, 2006. "Impacts économiques de la révolution numérique," Revue économique, Presses de Sciences-Po, vol. 57(3), pages 347-375.
    2. Antipa, P. & Cette, G. & Frey, L. & Lecat, R. & Vigna, O., 2008. "Recent trends in productivity: structural acceleration in the euro area and deceleration in the United States?," Quarterly selection of articles - Bulletin de la Banque de France, Banque de France, issue 11, pages 33-50, Spring.
    3. Gilbert Cette & Jimmy Lopez, 2012. "ICT demand behaviour: an international comparison," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 21(4), pages 397-410, June.
    4. Hyunbae Chun, 2007. "The Impact Of Information Technology On Labor Productivity Growth: Evidence From Five OECD Countries, 1970-1990," Korean Economic Review, Korean Economic Association, vol. 23, pages 5-32.
    5. Gilbert Cette & Jimmy Lopez, 2008. "What Explains the ICT Diffusion Gap Between the Major Industrialized Countries: An Empirical Analysis?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 17, pages 28-39, Fall.

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    More about this item

    Keywords

    education; productivity; regulation; ICT;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • 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
    • R34 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Input Demand Analysis

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