Do R&D and ICT Affect Total Factor Productivity Growth Differently?

Harald Edquist and Magnus Henrekson ()

No 1108, Working Paper Series from Research Institute of Industrial Economics

Abstract: We analyze the effect of ICT and R&D on total factor productivity (TFP) growth across different industries in Sweden. R&D alone is significantly associated with contemporaneous TFP growth, thus exhibiting indirect effects. Although there is no significant short-run association between ICT and TFP, we find a positive association with a lag of seven to eight years. Thus, R&D affect TFP much faster than ICT-investments. We also divide ICT capital into hardware and software capital. To our knowledge, this distinction has not been made in any previous study analyzing TFP at the industry level. The results show that lagged hardware capital services growth is significantly associated with TFP growth. Hence, investments complementary to hardware are needed to reap the long-run TFP effects from reorganizing production.

Keywords: ICT; R&D; Hardware; Software; Total factor productivity; Panel data analysis (search for similar items in EconPapers)
JEL-codes: L16 O33 O47 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2016-02-08, Revised 2016-11-28
New Economics Papers: this item is included in nep-cse, nep-eff, nep-ent, nep-gro, nep-ict, nep-ino and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published as Edquist, Harald and Magnus Henrekson, 'Do R&D and ICT Affect Total Factor Productivity Growth Differently?' in Telecommunications Policy, 2017, pages 106-119.

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Related works:
Journal Article: Do R&D and ICT affect total factor productivity growth differently? (2017)
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