Impact of ICT and Human Skills on the European Financial Intermediation Sector

19 Pages Posted: 22 Oct 2008

See all articles by Georg Erber

Georg Erber

European Productivity Research Center (EPRC)

Reinhard Madlener

RWTH Aachen University

Multiple version iconThere are 2 versions of this paper

Date Written: October 22, 2008

Abstract

This paper investigates the impact of ICT- and non-ICT capital, and of labour at different skill levels, on productivity and employment in the financial intermediation sector of twelve EU member countries plus the US and Japan. A stochastic possibility frontiers (SPF) approach is applied to assess the relation between the production inputs and to compute both time-varying and average inefficiencies. For the empirical analysis, annual data from 1995 to 2005 are employed that were obtained from recently released data contained in the EU KLEMS database. The results obtained shed some light on the relative impact of ICT- and non-ICT capital and labour inputs, and provide new insights about the structural dynamics between these factor inputs. We find that the financial sectors in the twelve EU member states studied are quite similar in terms of efficiency, and that efficiency and productivity depends much more on human capital than on physical capital. We conclude that learning-by-doing and learning-by-using are more decisive elements in shaping the productivity growth path than ICT investment alone, which can leave managers and employees overwhelmed by the complexity and needs of structural adjustments in the companies' organisation.

Keywords: stochastic production possibility frontiers, ICT, structural dynamics, financial services industries

JEL Classification: C23, C51, D23, E23, O33, O47, O57

Suggested Citation

Erber, Georg and Madlener, Reinhard, Impact of ICT and Human Skills on the European Financial Intermediation Sector (October 22, 2008). Available at SSRN: https://ssrn.com/abstract=1287985 or http://dx.doi.org/10.2139/ssrn.1287985

Georg Erber (Contact Author)

European Productivity Research Center (EPRC) ( email )

No Address Available
United States

Reinhard Madlener

RWTH Aachen University ( email )

School of Business and Economics / E.ON ERC
Mathieustraße 10
Aachen, 52074
Germany
+49 241 80 49 820 (Phone)
+49 241 80 49 829 (Fax)

HOME PAGE: http://www.eonerc.rwth-aachen.de/fcn

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
51
Abstract Views
623
rank
285,262
PlumX Metrics