What is it about?

What drives total factor productivity (TFP) dynamics in the information and communication technology (ICT) sector? Firm-level TFP dynamics in the ICT sector are studied.

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Why is it important?

Advancements in productivity in the digital economy constitute an important engine for economic growth. The ICT sector is especially important in terms of innovation and productivity improvements in the digital economy with the use of artificial intelligence, big data, and computerized information.


Intangible assets have positive effects on TFP growth. The positive effect of intangible assets on TFP growth is larger for ICT manufacturing firms than for ICT service firms. Leverage also has positive impacts on TFP growth. TFP is catching up to the technological frontier in the ICT sector. Larger and/or younger ICT firms show higher TFP growth. Economies of scale are more prominent in the ICT service sector than in the ICT manufacturing sector.

Dr. Ryota Nakatani
International Monetary Fund

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This page is a summary of: Total factor productivity enablers in the ICT industry: A cross-country firm-level analysis, Telecommunications Policy, October 2021, Elsevier, DOI: 10.1016/j.telpol.2021.102188.
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