No. 419 - ICT Accumulation and Productivity Growth in the United States: an Analysis Based on Industry Data

The paper analyses labour productivity (LP) and total factor productivity (TFP) dynamics in the United States using new data at the industry level on information and communications technology (ICT) capital stock in both manufacturing and the services sector. In manufacturing, a growth accounting exercise confirms that the contribution to LP of ICT accumulation in most industries has been higher in the second half of the nineties than in 1973-1995. TFP has also been accelerating, even controlling for cyclical output fluctuations, especially in ICT-intensive industries. We have also found evidence of a recent direct positive effect on TFP growth of ICT intensity, though only in ICT-intensive industries. In the services sector a direct effect of ICT accumulation on the acceleration of LP could be detected through both a growth accounting exercise and estimating a value added function. Moreover, we also have found evidence of a significant TFP acceleration after 1996, even controlling for cyclical effects. Econometric evidence supporting a positive effect of ICT capital accumulation on TFP growth is still rather weak, though some signs have emerged that computers accumulation has positively affected TFP dynamics in recent years.