The IT revolution across the U.S. states

Francesco Daveri and Andrea Mascotto

No 226, Working Papers from IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University

Abstract: This paper presents evidence on the geographical dimension of the IT revolution in the U.S. economy. BEA and Census data show that, although neither IT diffusion nor the productivity revival was geographically narrow, the matching of the two across the U.S. states has been far from perfect. The late 1990s productivity acceleration mostly occurred in those states specialized in the production of IT goods & services as well as of non-IT durable goods. When those states are excluded from the sample, the remaining states do not exhibit any significant acceleration in productivity. In particular, the association between productivity gains and IT use is at best weak at the state level. This contrasts with previous aggregate and sector evidence, where the importance of both IT production and use was stressed.

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