Abstract
Macro-production functions which include purchased information services as an intermediate input are estimated for the manufacturing sectors of Japan, Korea and Taiwan. The aim is to assess the degree of suboptimal use of this input. Similar previous studies mainly concentrated on the US, using single equation estimation methods. Using a translog function approach, the results in this study seems to indicae hat purchased information services are used suboptimally in the manufacturing sectors of all three economies. The largest suboptimal use is observed in Korea. Economic policies fostering the development of information service industries might therefore be more urgent in NICs than in developed economies. However, out results are subject to the assumption of perfect competition in product and factor markets.
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