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The Impact of ICTs and Digitalization on Productivity and Labor Share: Evidence from French firms

Gilbert Cette (), Nevoux Sandra and Py Loriane

Working papers from Banque de France

Abstract: Taking advantage of an original firm-level survey carried out by the Banque de France, we empirically investigate how the employment of ICT specialists (in-house and external) and the use of digital technologies (cloud and big data) have an impact on firm productivity and labor share. Our analysis relies on the survey responses in 2018 of 1,065 French firms belonging to the manufacturing sector and with at least 20 employees. To tackle potential endogeneity issues, we adopt an instrumental variable approach as proposed by Bartik (1991). The results of our crosssection estimations point to a large effect: ceteris paribus, the employment of ICT specialists and the use of digital technologies improve a firm’s labor productivity by about 23% and its total factor productivity by about 17%. Conversely, the employment of in-house ICT specialists and the use of big data both have a detrimental impact on labor share, of about 2.5 percentage points respectively.

Keywords: Productivity; ICT; digitalization (search for similar items in EconPapers)
JEL-codes: O3 O4 J24 L11 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2020
New Economics Papers: this item is included in nep-eff, nep-eur, nep-ict, nep-lma and nep-tid
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Working Paper: The impact of ICTs and digitalization on productivity and labor share: evidence from French firms (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:bfr:banfra:785

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