ICT Externalities: Evidence from cross country data
No 2007-021, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)
This paper reports the findings of an empirical study on the external effects of Information and Communication Technologies (ICT) on economic growth and productivity at an aggregate level. It focuses on possible network effects and spillovers emerging as externalities from investments in ICT. The existence of externalities is well described in theoretical work however empirical evidence is scarce. By using time series at the macro level for a panel of 15 countries I find positive externalities for investments in IT software and in telecommunication equipment, but not for IT hardware. The analysis, which accounts for cyclical effects and also takes external effects from non-ICT factors into account, points at considerable lags between the time of investing in these technologies and the time at which the externalities arise. Taking these externality effects into account, the paper shows that the impact of ICT on productivity is almost twice as high as compared to a model that does not include such effects.
Keywords: Productivity; Network Effects; Spillovers; Information and Communication Technologies; Total Factor Productivity (search for similar items in EconPapers)
JEL-codes: D24 D85 O11 O47 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:unm:unumer:2007021
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