Is there an ICT impact on TFP? A heterogeneous dynamic panel approach

Mary O'Mahony () and Dr Michela Vecchi ()

No 219, National Institute of Economic and Social Research (NIESR) Discussion Papers from National Institute of Economic and Social Research

Abstract: Using a new set of industry data for the US and the UK and an appropriate econometric approach, this paper provides new evidence on the impact of Information and Communication Technology (ICT) on Total Factor Productivity (TFP). We compare the results from standard panel data techniques with an heterogeneous dynamic panel data estimation method. The traditional industry panel data analysis fails to find a positive impact of ICT on output/TFP growth. This paper argues that this is due to heterogeneity across industries, particularly in the time dimension. The alternative technique we use, which allows for industry specific dynamics, yields a positive and significant long-run impact of ICT on TFP.

Date: 2003-05
New Economics Papers: this item is included in nep-eff
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Persistent link: https://EconPapers.repec.org/RePEc:nsr:niesrd:219

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