Estimating The Impact Of R&D Spending On Total Factor Roductivity For OECD Countries: Pooled Mean Group Approach

The paper examines economic growth in old and new member countries of the European Union (EU-15 and EU-12) during the years of 1994–2000 and 2001–2008 mainly due to changes in information and communication technology (ICT) capital development. The first group EU-15 is presented by old EU countries and the second group EU-12 is presented by new member countries that joined the EU in 2004–2007. The threefactor Cobb-Douglas production function is estimated through the panel general least squares method. The input factors that might influence the economic growth are labour, ICT capital services and non-ICT capital services. Since ICT capital growth data are not available for all selected economies, the groups of countries were reduced to EU-14 and EU-7. The estimated panel production functions confirmed that the average growth of GDP in the EU-7 countries was supported by the stable growth of labour quantity and ICT-capital and increasing total factor productivity. A short-term drop in non-ICT capital growth with follow-up stagnation was caused rather by lower labour productivity. The research discovered that the drop in GDP growth in the EU-14 countries was a result of the slower growth of non-ICT capital and total factor productivity and the stagnated growth of ICT capital with low elasticity, and showed that even the compensation of growth in labour quality did not prevent a decrease in total factor productivity and economic growth.

This study advances research on the contribution of Information and Communications Technology (ICT) to productivity. The research extends previous work reported in Roeller and Waverman (2001) and Fuss and Waverman (2005) to Australia. We use an econometric model that estimates the relationships that drive productivity so as to analyse the sources of productivity differences. Using the model we analyse the factors explaining observed differences in productivity between countries and how this changes over time. For this purpose the study uses a unique cross country data set including 18 OECD countries, and covering the period 1980 to 2003. The study examines not only the impact of a larger stock of ICT capital on productivity (ICT capital deepening), but also the potential spillover network and externality, effects of ICT (ICT spillovers). Recognising that the networking of computers, in for example the internet, rather than simply the growth of ICT capital may be the important characteristic to focus on. The study controls for the endogenous nature of ICT diffusion and adoption and therefore reverse causality, in that as GDP increases, demand for ICT increases to the extent demand for ICT is income elastic. Failure to control for this effect may lead to an overestimate of the effect of ICT on GDP. Our comparison of US labour productivity (GDP per hour worked) with that in Australia shows the US was calculated to be 16.5% higher than in Australia in 2003. 17% of this labour productivity gap in 2003 was attributed to the US enjoying greater returns to scale than Australia. The combination of ICT capital deepening and ICT spillovers however accounted for 28% of the US’s labour productivity advantage. Production in the US in 2003 was more ICT capital intensive than production in Australia (capital deepening). In addition personal computer penetration, our indicator of the spread of ICT technology, was greater in the US than in Australia (ICT spillovers). Australia recorded a slight advantage in telecommunications penetration. Consistent with our research for other countries, it appears that ICT spillover effects play a greater role in explaining productivity differences than the direct ICT capital deepening effect. For example, ICT capital deepening accounted for 5% of the Australia-US labour productivity gap, whereas ICT spillovers accounted for 23% of the gap. Thus although both were important, we estimate that the Australia-US difference in the spread of ICT technology throughout the economy was a more important source of the labour productivity gap than the difference in ICT capital accumulation. Most of the impact of ICT spillovers is due to what we are calling IT penetration. This phenomenon is modelled as the penetration of personal computers plus the interaction of this spread with the digitalisation of the telecom network. We attribute 26% of the 16.5%Australian labour productivity disadvantage in 2003 to the fact that the US had a greater IT penetration than Australia. This disadvantage is offset to a small degree by Australia slight advantage in terms of telecommunications penetration Turning to a comparison of labour productivity between Australia and Europe for the years 2000 and 2003, in 2000 Australia had a labour productivity disadvantage of 14.5% compared with Europe. By 2003 Australia had narrowed that gap to 9.4%. This improvement is associated with a substantial gain in the relative contribution of ICT. While the productivity gap relating to non-ICT capital deepening moved only slightly, Australia closed the gap by 2.5 percentage points through greater ICT deepening and ICT spillovers effects. Australia’s productivity gap with Europe is quite different to the gap with the United States. Compared with Europe Australia is behind in non-ICT capital deepening but significantly ahead in ICT capital deepening, and benefits substantially from ICT spillovers. In 2003, 2.6 percentage points of the 9.4% gap with the Europe can be attributed to greater non-ICT capital deepening in Europe. In contrast, Australia is ahead in terms of ICT contribution to labour productivity. In 2003, Australia had a 12.3 percentage point advantage in terms of ICT contribution to labour productivity over and above that of Europe. We further examine, and report results on Total Factor Productivity (TFP) growth over a longer period 1998-2003, for Australia, US, Europe and Canada. Over the five year period 1998-2003, we estimate that TFP grew the fastest in Australia at 13.5% compared to 12.4% in the US, just over 10% in Canada, and just under 10% in Europe. In common with other researchers, we find that over this period Australia and the US had a particularly impressive TFP growth record. The higher TFP growth rate in Australia and US is attributed to a higher cumulative contribution of ICT spillovers: 14.9% in Australia, 13.8% for the US, compared with 12% in Canada and the 11.3% average for Europe.

This paper advances a model to explain the total factor productivity in Asian countries, most of which are labor surplus and are endowed with substantial human capital. Such promising demographic potentials are considered as complementary factors to use of Information and Communication Technology (ICT). Population with such favorable demographic traits and access to ICT results in higher Total factor productivity (TFP). We call this as Demo-Tech-TFP Model and is tested by using data for 2000-2010 of 24 Asian countries. Econometric concerns like presence of endogenous and/or predetermined covariates and small time-series and cross-sectional dimensions of panel dataset are tackled by using System Generalized Method of Moments (SYS-GMM). Results show considerable support for the Demo-Tech-TFP hypothesis. Need is to design such models that suit the local demography and patterns of technological diffusion currently taking place in developing countries.Keywords: Information and communication technology (ICT), Total Factor Productivity (TFP), Demographic features, Generalized Method of MomentsIntroductionFrom pre-historic times man has under- taken to store, recollect, and process infor- mation as a source of value. Starting from image carving in stone walls to today's digi- tal technology, the information is handled in a number of ways [24]. The ICT revolution is crucial insofar as it involves technologies geared to the production and dissemination of knowledge and information. These new technologies, that first emerged in the 1950s and then really took off with the advent of the Internet, have breath-taking potential [15]. ICT has affected agriculture, industry and services sectors of economies world over like no other technology in past [2]. Terms like information economy, digital economy, e-economy, weightless economy, paperless economy have been floated over the last 3 decades to term this readily evolving kind of economy. For instance, one of the pioneering works in this regard was a report by [35]. Later, during mid-90s term 'New Economy' was introduced to represent the marvelous growth in software industry in US.In his famous treatise, 'Major Economic Cy- cles', [30] has pointed out the existence of tides of surging economic activity. These economic cycles are called as 'Kondratiev Waves'. There is growing consensus that the rise of 'New economy' during 1990s and the burst of the 'dotcom' bubble in 2001 can be the 5th Kondratiev Wave and the stimulus behind it is ICT [30].2 ICT in Asian RegionAsia as one of the densely populated regions of the world has shown high demand for ICT products after the falling prices of ICT equipment during the last quarter of 20th cen- tury. Policy reforms of deregulation and pri- vatization in Asian countries like India, Paki- stan, China and Indonesia and has enabled the spread of ICT [39].A dataset of 24 countries is included in em- pirical analysis for the time span 2000-2010 depending on the availability of data. The chosen indicators are fixed broadband inter- net subscribers (FBBS), fixed internet sub- scribers per 100 inhabitants (FIS), internet users per 100 inhabitants (INTU), fixed tele- phone lines per 100 inhabitants (FTL), in- formation & communication technology maturation index (ICTMI), internet users per 100 inhabitants (INTU) and mobile cellular telephone subscriptions per 100 inhabitants (MBLC). ICTMI (Information and Commu- nication Technology Maturation Index) is in- spired from Information and Communication Development Index (IDI) in [42] 'Measuring Information Society' published by Interna- tional Telecommunication Union (ITU).3 Literature SurveyStudies at macroeconomics level showing the impact of demographic factors and ICT on TFP are, to our knowledge, scarce. [20] ex- plore the ICT-productivity relationship in Spanish firms. Their innovation was to intro- duce a set of organizational variables (work- ers' qualifications, management attitude and process innovation) which would support the ICT to have its impact on organizational productivity. …

Total factor productivity enablers in the ICT industry: A cross-country firm-level analysis

The impact of Information and Communication Technology (ICT) on Total Factor Productivity (TFP) is analysed under the hypothesis that a greater use of ICT may help firms to increase their efficiency. ICTs are considered as General Purpose Technologies (GPTs), i.e. drastic technological innovations that are characterised by pervasiveness, technological dynamism, and innovative complementarities. The paper concerns a micro-econometric analysis of Italian manufacturing firms using the data of two surveys carried out by Mediocredito Centrale–Capitalia. The impact of ICTs on Italian firms' TFP is analysed under the assumption that ICTs positively influence the TFP directly through investments, and indirectly through the new composition of inputs required by ICTs to fully exploit their benefits. Estimated results confirm that either ICT investments or the complementary factors have a positive influence on firm's TFP. It is also found that firms that invest in ICT are able to reach higher level of efficiency than firms that do not.

Does ICT create a new driving force for manufacturing?—Evidence from Chinese manufacturing firms

Since the reform and opening up to the outside world, China’s economy has created a remarkable growth miracle. However, as China enters the new normal economy, the world is full of doubts about its potential for economic growth. The article proper concerns an analysis on some factors affecting China’s economic growth, such as physical capital, labor quality, labor quantity, energy consumption, and environmental cost. Also embraced in this article is the measurement of the contribution of each factor to total factor productivity. The research is conducted on the basis of the provincial panel data of China over 2002–2016, from the perspective of cleaner production. The results reveal that (a) China’s economic growth had significant positive correlations with factor inputs, including traditional input elements (physical capital, labor quantity, labor quality) and natural elements (energy consumption and environmental cost); (b) the direct and indirect effects of physical capital, labor quality, and energy consumption on economic growth were significantly positive, while those of environmental cost were significantly negative; and (c) the contributions of the factors to the total factor productivity were ranked respectively as follows: physical capital (48.63%), energy consumption (16.81%), labor quality (14.85%), environmental cost (10.88%), and labor quantity (8.83%). China’s economic growth belonged to “perspiration.” In addition to the traditional input factors, natural factors also played an important role in boosting China’s economic development. It is urgent how to highlight the role of labor quality, while downplaying the contribution of natural factors, and then shift to cleaner production in China.

Does ICT change the relationship between total factor productivity and CO2 emissions? Evidence based on a nonlinear model

The knowledge-based economy (K-economy) is not confined to information and communication technology (ICT) alone. Before the evolution of the ICT, it was knowledge that was embodied in human beings, namely 'human capital' and technology that was embodied in the capital investment undertaken by the Asian economies that brought about the so-called Asian miracle. Using ICT in the activities of Malaysia's economy contributes significantly to its productivity growth, in general, and total factor productivity (TFP) growth of the economy, in particular. The results of this study showed that the contribution of the ICT and human capital used in the economy were the highest among the input terms. The impact of ICT and human capital in TFP contributions is significant. But the growth rate of TFP is lower compared with the growth rate of the ICT and human capital. As a result, the achievement of the K-economy is not like that of the ICT and human capital development.

Information and Communication Technology (ICT) is recognized as a critical driver of economic development in the modern era, significantly enhancing the productivity of production factors. However, the widespread adoption of ICT, particularly in countries reliant on fossil fuels, may contribute to increased greenhouse gas emissions, including carbon dioxide (CO2). So, this study investigates the interconnections among ICT, CO2, renewable energy, and Total Factor Productivity (TFP) in Iran. This descriptive-analytical and applied study used time series data from the World Bank and Iran Statistics Center from 2000 to 2023. This study, the Autoregressive Distributed Lag (ARDL) model to evaluate the long-term and short-term dynamic, unit root tests and diagnostic tests CUSUM and CUSUMQ and Canonical Co-Integrating Regression (CCR) Dynamic least squares (DOLS), and fully modified least squares (FMOLS) have been used to validate the results of ADRL estimates. The results of the ARDL estimation method showed that in the long run, TFP and economic growth on carbon dioxide had a coefficient of 0.07 and 0.14, respectively. Renewable energy consumption with a coefficient of -0.0808 had a significant negative role in reducing carbon dioxide. The coefficient of -0.286 obtained for the ICT variable at 95% indicates a reduction in carbon dioxide in parallel with the development of ICT. CUSUM and CUSUMQ confirmed the stability of the parameters, and CCR, DOLS, and FMOLS regressions confirmed the results of the ADRL model. The study recommends adopting green technologies and effective energy policies to balance productivity gains with environmental protection.

Link between Information and Communication Technology (ICT) and Total Factor Productivity (TFP) has been explored in detail. Particularly in the industrialized world, the productivity conundrum has received much attention. This study aims to shed light on this connection within the context of the productivity riddle by empirically evaluating the effect of ICT Access on Total Factor Productivity in Nine Developing Economies in Asia from 2000- 2018. The empirical research is based on a PCA representing the ICT Access and other control variables that can potentially impact growth of Total Factor Productivity (TFP). Study employed FE model with robust clustered standard errors. Outcomes designate that ICT Access, Investment (I), and, R&D impact the TFP growth of sample countries. The study contributes to the ICT and TFP relationship by dwelling deep into the component of ICT. The policy implications drawn from this research exercise point to the fact that ICT’s total impact on TFP can only be realized by increasing access to ICT thereby reducing the digital divide and making ICT accessible for all in a given economy

In this paper, we analyze the progressive effects of Information and Communication Technology (ICT) use in terms of regional productivity based on regional economic data. To consider as many factors as possible, we used the Total Factor Productivity (TFP) as the main indicator of productivity. Each Regional TFP index was calculated following the example of Caves-Christensen-Diewert to compare not only differences among prefectures but also time series. The indices showed the progress of ICT use are as follows: the ratio of enterprises in the region using fiber-to-the-home (FTTH) services (enterprise FTTH use), the ratio of enterprises in the region using a network among enterprises (enterprise network use), the regional average of the amount that indicates whether or not enterprises in the region employ a Chief Information Officer (CIO) (CIO establishment), the ratio of enterprises in the region using a telework system (enterprise telework use), the ratio of establishing local public networks in the region (local public network rate), and the ratio of classrooms in the region connected to a LAN (local area network) (LAN classroom rate). First, we estimated TFP employing the panel instrument variable method, using the panel fixed effect and random effect models, due to the possibility of endogeneity. Second, we employed a two-step system GMM to take into consideration endogeneity, autocorrelation and reverse causality of dependant and explanatory variables. The results indicate that increased use of ICT has a positive effect on regional productivity. In addition, these results show that not only enterprise ICT use (enterprise FTTH use, enterprise network use, CIO establishment and enterprise telework use) but also, through enterprise ICT use, regional informationalization (local public network rate, LAN classroom rate) can have a positive effect on the productivity of regional economies in Japan. We conclude that a positive attitude toward an informationalized society can have a positive effect on productivity at the prefectural level.JEL classification: O11, O18, O33, O47, E23

BackgroundPromoting the sustained and stable growth of the national economy is the eternal goal of economic theory researchers and policy makers. So, what is the fundamental source of promoting a country's sustainable economic growth?Research Objects and MethodsFrom the perspective of labor, physical capital, human capital and total factor productivity, this paper makes an empirical study on the contribution of various input factors to economic growth in 36 OECD countries from 1990 to 2017. In order to analyze the impact of this strategy on the change of livelihood capital on emotion, and provide effective measures and basis for alleviating psychological pressure. In this study, 500 subjects in Southwest China were investigated with Depression Anxiety Stress Scale (DASS-21).ResultsThe results show that: (1) the output elasticity of labor, physical capital and human capital input factors is statistically significant, indicating that input has an important impact on economic growth. (2) The total contribution share of investment accounts for about 1 / 3, of which labor force accounts for about 24%, and the proportion of physical capital and human capital accounts for 5% and 6% respectively is similar and relatively small. (3) Total factor productivity (TFP) is the most important driving force of economic growth, accounting for 2 / 3 of economic growth. (4) The contribution of labor and material capital showed a slow upward trend, the contribution of human capital was basically stable, and the contribution of total factor productivity showed a slow downward trend. (5) Exploring the sources of economic growth has important policy implications not only for OECD countries but also for developing countries. Taking the emotional grouping as the independent variable, the group conducted a one-way multivariate analysis of variance on the fluency and novelty of aut, box's M = 24.05, P < 0.001. The result shows that the data is not suitable for multivariate analysis of variance, so the emotional grouping is used as the independent variable to analyze the fluency and novelty of aut by one-way ANOVA respectively. Specifically, the main effect of emotion on aut fluency is significant, f (2, 99) = 6.43, P = 0.002, η 2 p= 0.12. Post hoc comparison showed that the anger group (M = 11.26, SD = 6.20) was higher than the neutral emotion group (M = 7.26, SD = 3.44, P = 0.002, Cohen's d = 0.80), with no other significant difference (see Figure 2D). The main effect of emotion on the novelty of aut was significant, f (2, 99) = 7.84, P < 0.001, η 2 p = 0.14. Post hoc comparison showed that the anger group (M = 15.29, SD = 8.85) was higher than the sadness group (M = 11.21, SD = 5.50, P = 0.042, Cohen's d = 0.55) and the neutral emotion group (M = 8.91, SD = 5.23, P = 0.001, Cohen's d = 0.88).ConclusionAll sectors of society should fully understand the importance of emotional factors of relevant groups in rehabilitation, actively improve the surrounding environment and the respective roles of both sides, pay special attention to their own virtual technology language and behavior, and shift from single display to multi-dimensional management, coordinator and collaborator. In the process of output, actively present personalized psychology to patients, flexibly organize activities, strive to create a relaxed and harmonious rehabilitation atmosphere, create a friendly and mutual aid business environment, encourage and guide patients to adjust their psychology to the best state.AcknowledgementsThe work is supported by Open Fund Project of Research Center for Economy of Upper Reaches of the Yangtse River of Chongqing Technology and Business University (KFJJ2018002). The author is highly grateful to the editor and anonymous referees for their valuable comments and constructive suggestions which help to improve the present form of this paper.

Solow's paradox has disappeared in the United States but remains alive and well in the United Kingdom. In particular, the United Kingdom experienced an information and communications technology (ICT) investment boom in the 1990s, in parallel with the United States, but measured total factor productivity (TFP) has decelerated rather than accelerated in recent years. We ask whether ICT can explain the divergent TFP performance in the two countries. Stories of ICT as a general purpose technology (GPT) suggest that measured TFP should rise in ICT-using sectors (reflecting either unobserved accumulation of intangible organizational capital, spillovers, or both) but perhaps with long lags. Contemporaneously, investments in ICT may in fact be associated with lower TFP because resources are diverted to reorganization and learning. In both the United States and the United Kingdom, we find a strong correlation between ICT use and industry TFP growth. The U.S. results are consistent with GPT stories: the acceleratio...

This paper deals with the contribution of information and communication technology (ICT) to economic growth and to labour and multi-factor productivity. It uses a well-established growth accounting framework to assess the role of ICTs as capital inputs and the contribution of these capital inputs to output growth. The paper provides an international perspective by presenting results for the G7 countries. For this purpose, data on ICT investment expenditure were compiled from several sources, to construct measures of ICT capital stocks and capital services. Special care was taken to account for the methodological differences in price deflators for computers as they exist across OECD countries. For all seven countries, the report finds that ICT capital goods have been important contributors to economic growth, although the role of ICT has been most accentuated in the United States. An important limitation of the study lies in the timeliness of internationally comparable data. ...