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Digitalisation and productivity: In search of the holy grail – Firm-level empirical evidence from EU countries

Peter Gal, Giuseppe Nicoletti, Theodore Renault, Stéphane Sorbe and Christina Timiliotis

No 1533, OECD Economics Department Working Papers from OECD Publishing

Abstract: This paper assesses how the adoption of a range of digital technologies affects firm productivity. It combines cross-country firm-level data on productivity and industry-level data on digital technology adoption in an empirical framework that accounts for firm heterogeneity. The results provide robust evidence that digital adoption in an industry is associated to productivity gains at the firm level. Effects are relatively stronger in manufacturing and routine-intensive activities. They also tend to be stronger for more productive firms and weaker in presence of skill shortages, which may relate to the complementarities between digital technologies and other forms of capital (e.g. skills, organisation, or intangibles). As a result, digital technologies may have contributed to the growing dispersion in productivity performance across firms. Hence, policies to support digital adoption should go hand in hand with creating the conditions to enable the catch-up of lagging firms, notably by easing access to skills.

Keywords: cloud computing; digitalisation; high-speed internet; ICT; productivity; skills (search for similar items in EconPapers)
JEL-codes: D24 J24 O33 (search for similar items in EconPapers)
Date: 2019-02-12
New Economics Papers: this item is included in nep-cse, nep-eff, nep-ict, nep-lma, nep-pay, nep-sbm and nep-tid
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