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Does ICT capital affect economic growth in the EU-15 and EU-12 countries?
- Source :
- Journal of Business Economics & Management; Apr2015, Vol. 16 Issue 2, p387-406, 20p
- Publication Year :
- 2015
-
Abstract
- 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. [ABSTRACT FROM PUBLISHER]
Details
- Language :
- English
- ISSN :
- 16111699
- Volume :
- 16
- Issue :
- 2
- Database :
- Complementary Index
- Journal :
- Journal of Business Economics & Management
- Publication Type :
- Academic Journal
- Accession number :
- 100015605
- Full Text :
- https://doi.org/10.3846/16111699.2012.754375