What's Spurious, What's Real? Measuring the Productivity Impacts of ICT at the Firm-Level

33 Pages Posted: 24 Oct 2002

See all articles by Thomas Hempell

Thomas Hempell

Center for European Economic Research (ZEW)

Date Written: August 15, 2002

Abstract

In order to assess the productivity effects of information and communication technologies (ICT), regressions based on cross-sectional firm-level data may yield unreliable results for the commonly employed production function framework. In this paper, various estimation biases and econometric strategies to overcome their sources are discussed. The effects are illustrated on the basis of a representative set of panel data for German service firms. The application of a suited SYS-GMM estimator yields evidence for significant productivity effects of ICT which are substantially smaller though than those suggested by cross-section or pooled OLS estimates.

Keywords: Productivity, Information and Communication Technologies, Production Function Estimation, Panel Data, Services

JEL Classification: C23, C81, D24, L80

Suggested Citation

Hempell, Thomas, What's Spurious, What's Real? Measuring the Productivity Impacts of ICT at the Firm-Level (August 15, 2002). ZEW Discussion Paper No. 02-42. Available at SSRN: https://ssrn.com/abstract=325261 or http://dx.doi.org/10.2139/ssrn.325261

Thomas Hempell (Contact Author)

Center for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
L 7,1 D-68161 Mannheim
Germany

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