Ruhr Economic Papers

Ruhr Economic Papers #828

ICT and Productivity Growth within Value Chains

by Chuan Liu and Marianne Saam

RUB, 12/2019, 34 S./p., 8 Euro, ISBN 978-3-86788-961-2 DOI: 10.4419/86788961

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Abstract

To what extent have economies become better off because of the diffusion of information and
communication technologies (ICT)? We analyze this question based on a growth accounting approach
at the level of final output. This approach traces productivity improvements not within sectors but
within value chains. It allows judging in a better way to what extent more or better products have
become available to final users, in particular consumers, as a result of the diffusion of ICT. A main
result is that more than half of the productivity gains related to ICT capital deepening for manufactured
goods are contributed by upstream industries. The major part of this contribution is domestic rather
than foreign. Moreover, the high sectoral growth in total factor productivity (TFP) in the ICT sector
contributes only moderately to TFP growth in non-ICT value chains via the use of intermediates.

JEL-Classification: E22, F62, O47

Keywords: ICT; economic growth; productivity; value chains; growth accounting

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