E-Business Implications for Productivity and Competitiveness

TL;DR

This paper examines how ICT investments influence productivity and competitiveness across European Union countries, highlighting the varying impacts and underlying factors affecting these outcomes.

Contribution

It provides an analysis of ICT and TFP contributions to productivity growth in EU countries, emphasizing the importance of sector-specific and company-specific factors.

Findings

ICT investment accelerates TFP growth in the EU

Variation exists in ICT's impact on productivity among countries

Company requirements and labor adjustments influence ICT's effectiveness

Abstract

Information and Communication Technology (ICT) affects to a great extent the output and productivity growth. Evidence suggests that investment growth in ICT has rapidly accelerated the TFP (total factor productivity) growth within the European Union. Such progress is particularly essential for the sectors which themselves produce new technology, but it is dispersing to other sectors, as well. Nevertheless, decrease in ICT investment does not necessarily decline the ICT contribution to output and productivity growth. These variations come out from the problems related to the particular phenomenon proper assessment, but predominantly from the companies' special requirements, as well as the necessary adjustments of labour employed. Hence, this paper aims at estimating the huge distinction in terms of ICT and TFB contributions to labour productivity growth among some of the European member states, as well as the factors which might stand behind the particular findings.