Investment in ICTs: an empirical analysis

Gilbert Cette, Jimmy Lopez () and Pierre-Alexandre Noual
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Pierre-Alexandre Noual: Centre de recherche de la Banque de France - Banque de France

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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.

Keywords: education; productivity; regulation; ICT (search for similar items in EconPapers)
Date: 2005
Note: View the original document on HAL open archive server: https://hal.science/hal-01247384
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Published in Applied Economics Letters, 2005, 12, ⟨10.1080/13504850500042280⟩

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Related works:
Journal Article: Investment in ICTs: an empirical analysis (2005)
Working Paper: Investment in Information and Communication Technologies: an Empirical Analysis (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01247384

DOI: 10.1080/13504850500042280

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