In Search of An ICT Impact on TFP: Evidence from Industry Panel Data

Michela Vecchi () and Mary O'Mahony

No 210, Royal Economic Society Annual Conference 2003 from Royal Economic Society

Abstract: This paper uses a new set of industry data for the US and the UK non-agricultural market economy, to provide new evidence on the impact of ICT on TFP. We compare the results from standard panel data techniques with newly developed dynamic panel data estimation methods. The traditional industry panel data analysis fails to find a significant impact of ICT on output/TFP growth. This paper argues that this is due to heterogeneity across industries, particularly in the time dimension. An alternative technique which allows the dynamic specification to vary across industries yields a positive and significant long-run impact of ICT on TFP.

Keywords: productivity; ICT capital; heterogeneous dynamic panels (search for similar items in EconPapers)
JEL-codes: C33 C44 D24 O3 (search for similar items in EconPapers)
Date: 2003-06-04
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