Share:


Does ICT capital affect economic growth in the EU-15 and EU-12 countries?

    Jana Hanclova Affiliation
    ; Petr Doucek Affiliation
    ; Jakub Fischer Affiliation
    ; Kristyna Vltavska Affiliation

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.

Keyword : ICT capital, economic growth, Cobb-Douglas production function, total factor productivity, panel estimation, panel unit roots tests, EU countries

How to Cite
Hanclova, J., Doucek, P., Fischer, J., & Vltavska, K. (2014). Does ICT capital affect economic growth in the EU-15 and EU-12 countries?. Journal of Business Economics and Management, 16(2), 387-406. https://doi.org/10.3846/16111699.2012.754375
Published in Issue
Dec 16, 2014
Abstract Views
439
PDF Downloads
435
Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.