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The economic contribution of the "C" in ICT: evidence from OECD countries

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Title: The economic contribution of the "C" in ICT: evidence from OECD countries
Authors: Goodridge, P
Haskel, J
Edquist, H
Item Type: Journal Article
Abstract: Numerous studies have documented the contribution of ICT to growth. Less has been done on the contribution of communications technology, the “C” in ICT. We construct an international dataset of fourteen OECD countries and present contributions to growth for each ICT asset (IT hardware, CT equipment and software) using alternative ICT deflators. Using each country’s deflator we find that the contribution of CT capital deepening to productivity growth is lower in the EU than the US. Thus we ask: is that lower contribution due to a lower rate of CT investment or differing sources and methods for measurement of price change? We find that: (a) there are still considerable disparities in measures of ICT price change across countries; (b) in terms of growth-accounting, price harmonisation has a greater impact on the measured contributions of IT hardware and software in the EU relative to the US, than that of CT equipment; over 1996–2013, harmonising investment prices explains just 15% of the gap in the EU CT contribution relative to the US, compared to 25% for IT hardware; (c) over 1996–2013, CT capital deepening accounted for 0.11% pa (6% as a share) of labour productivity growth (LPG) in the US, compared to 0.03% pa (2.5% of LPG) in the EU-13 when using national accounts deflators; and (d) using OECD harmonised deflators, the figure for the EU-13 is raised to 0.04% pa (4% of LPG).
Issue Date: Dec-2019
Date of Acceptance: 8-Jul-2019
URI: http://hdl.handle.net/10044/1/43209
DOI: 10.1016/j.jce.2019.07.001
ISSN: 0147-5967
Publisher: Elsevier
Start Page: 867
End Page: 880
Journal / Book Title: Journal of Comparative Economics
Volume: 47
Issue: 4
Replaces: 10044/1/71888
http://hdl.handle.net/10044/1/71888
Copyright Statement: © 2019 The Authors. Published by Elsevier Inc. on behalf of Association for Comparative Economic Studies. This is an open access article under the CC BY license (http://creativecommons.org/licenses/BY/4.0/).
Sponsor/Funder: Ericsson Enterprise AB
Engineering & Physical Science Research Council (E
Economic & Social Research Council (ESRC)
Ericsson Enterprise AB
Funder's Grant Number: 9400628052
EP/K503733/1
ES/M500562/1
n/a
Keywords: Social Sciences
Economics
Business & Economics
Productivity
Telecommunications
Capital
Investment
Growth
Prices
Growth-accounting
INFORMATION TECHNOLOGY
UNITED-STATES
GROWTH
1990S
1402 Applied Economics
1499 Other Economics
Economics
Publication Status: Published
Online Publication Date: 2019-07-18
Appears in Collections:Imperial College Business School



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