ICT and Europe's Productivity Performance: Industry-Level Growth Account Comparisons with the United States

32 Pages Posted: 29 Dec 2005

See all articles by Robert Inklaar

Robert Inklaar

University of Groningen - Department of Economics

Mary O'Mahony

National Institute of Economic and Social Research (NIESR); University of Birmingham - Business School

Marcel P. Timmer

University of Gronigen - Faculty of Economics

Abstract

In this paper we present a new industry-level database to analyze sources of growth in four major European countries: France, Germany, Netherlands and the United Kingdom (EU-4), in comparison with the United States for the period 1979-2000. Aggregate labor productivity growth is decomposed into industry-level contributions of labor quality, ICT and non-ICT capital deepening and TFP. A small set of service industries is mainly responsible for the acceleration in ICT capital deepening in both regions, but their contribution to growth is lower in the EU-4 than in the U.S. TFP in these ICT-intensive services accelerated in the U.S. in the 1990s, but not in Europe. In addition, widespread deceleration in non-ICT capital deepening in the EU-4 has led to a European labor productivity slowdown.

Suggested Citation

Inklaar, Robert and O'Mahony, Mary and Timmer, Marcel P., ICT and Europe's Productivity Performance: Industry-Level Growth Account Comparisons with the United States. Review of Income and Wealth, Vol. 51, No. 4, pp. 505-536, December 2005. Available at SSRN: https://ssrn.com/abstract=857797 or http://dx.doi.org/10.1111/j.1475-4991.2005.00166.x

Robert Inklaar

University of Groningen - Department of Economics ( email )

P.O. Box 800
9700 AV Groningen
Netherlands

Mary O'Mahony

National Institute of Economic and Social Research (NIESR) ( email )

2 Dean Trench Street
Smith Square
London SW1P 3HE
United Kingdom

University of Birmingham - Business School

Edgbaston Park Road
Birmingham, B15 2TY
United Kingdom

Marcel P. Timmer (Contact Author)

University of Gronigen - Faculty of Economics ( email )

Postbus 72
9700 AB Groningen
Netherlands

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