Did electricity drive Spain’s “most progressive decade”?

Maria Teresa Sanchis Llopis
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Maria Teresa Sanchis Llopis: University of Valencia and Figuerola Institute of History and Social Sciences

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

Abstract: Following the growth accounting approach introduced by Oliner & Sichel (2000, 2002) to evaluate the impact of information and communications technologies on the U.S. economy in the 1990s, this paper analyses the impact of electricity on Spanish economic growth in the period 1958-1970. Spain was a follower country that exhibited the benefits of electricity nearly half a century after it had its biggest impact in the U.S. The results confirm that electricity played a significant role in Spain via the three channels identified in the literature for quantifying the contribution of a general purpose technology (GPT): capital deepening, the total factor productivity effect and the spillover effect. The overall impact is greater than that estimated for other follower countries in the 1920s. The main boost to growth came from improvements in productivity in developments in electric plants electricity and the production of electrical capital goods, not from electricity use. We also find a weaker positive effect of spillovers in electricity-using industries. The laggard effect of electrification in Spain, in spite of its early start, confirms that a GPT needs time to establish new institutional arrangements and complementary investments in order to display positive linkages deriving from the new technology.

Keywords: Technological change; Aggregate Productivity; Spain (country studies) JEL Classification: O33; O47; O52 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-ene, nep-his and nep-ino
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Persistent link: https://EconPapers.repec.org/RePEc:cge:wacage:309

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