The Relation of Information Technologies and the Total Factor Productivity in Uruguayan Firms

Miguel Mello Costa ()

No 2018004, Documentos de trabajo from Banco Central del Uruguay

Abstract: The aim of this article is to determine if the development of information and communication technologies (ICT) had any impact on the productivity of Uruguayan firms. For that, the work exploits the advantages of the data panels to make a dynamic estimation of the total factors productivity (TFP). I used micro-data unbalanced panel for the period 2007-2014 in which 6,492 companies were surveyed. Short-term production functions were estimated for all firms y sectors, distinguishing fixed capital from technological capital and controlling for labour qualification. Results suggest that there are decreasing returns to scale. Technological capital is a factor that contributes to the gross product of Uruguayan firms. Although the period analyzed is characterized by a continuous GDP growth, Total Factor Productivity (TFP) was negative for all sectors. This TFP estimated is not constant for firms but is persistence, consistent with an AR(1) process. There is a positive correlation between ICT utilization and TFP and the performance is heterogeneous between sectors, according to the share of productive factors.

Keywords: TFP; ICT; Productivity; Dynamic Panel Data; Productividad; datos de panel; modelos dinámicos (search for similar items in EconPapers)
JEL-codes: C23 L10 L11 L22 L23 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2018
New Economics Papers: this item is included in nep-eff and nep-ict
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