ICT Penetration and Aggregate Production Efficiency: Empirical Evidence for a Cross-Section of Fifty Countries

Repkine, Alexandre (2008): ICT Penetration and Aggregate Production Efficiency: Empirical Evidence for a Cross-Section of Fifty Countries.

Abstract

This study investigates the impact of telecommunications penetration on the aggregate production efficiency in a large cross-section of fifty countries. We show that higher levels of ICT capital stock penetration increase technical efficiency levels in the aggregate production function. However, depending on the geographical location the effects of ICT penetration are different. Our empirical findings suggest that increasing the per capita telecommunications capital in the form of land line and mobile telephones, computers, Internet access and the like is likely to considerably increase productive efficiency in case of the poorest nations, while in the more developed countries such gains have been largely exhausted. In the end we offer several avenues for more research based on the caveats discovered while working on this study.

• Item Type: MPRA Paper
• Language: English
• Keywords: economic growth; technical efficiency; telecommunications investment
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity

References

Aigner, D., et al., “Formulation and estimation of stochastic frontier production function models”, Journal of Econometrics, 6, 1977

Barry, B., and Triplett, J., “What’s new about the new economy? IT, economic growth and productivity”, Brookings Institution, 2000

Brynjolfsson, E., and Hitt., L., “Paradox Loss? Firm-Level Evidence on the Returns on Information System Spending”, Management Science, 42(4), 1996

Dewan, S., and Kraemer, K.L., “Information technology and productivity: evidence from country-level data”, Management Science 46(4), 2000.

Hardy, A.P., “The role of the telephone in economic development”, Telecommunications Policy, December 1980.

Jorgenson, D.W. and Stiroh, K.J., “Computers and growth”, Economics of innovation and new technology¸ 3(3-4), 1995.

O’Mahony, M., and Vecchi, M., “Is There an ICT Impact on TFP? A Heterogeneous Dynamic Panel Approach”, NIESR, 2003

Oliner, S.D. and Sichel, D.E., “Computers and output growth revisited: how big is the puzzle?”, Brookings Papers on Economics Activity, 1994

Schreyer, P., “The Contribution of Information and Communication Technology to Output Growth: a Study of the G7 Countries”, STI Working Paper, 2000

Thompson, H.G., and Garbacz, Ch., “Mobile, fixed line and internet service effects on global productive efficiency”, Information Economics and Policy, 19, 2007

Vu, Kh., “Measuring Impact of ICT Investment on Economic Growth”, mimeo, 2005