ICT and business productivity: Finnish micro-level evidence

Mika Maliranta, Petri Rouvinen

    Research output: Chapter in Book/Report/Conference proceedingChapter or book articleScientificpeer-review

    20 Citations (Scopus)


    Widespread use of ICT in Finnish business enterprises is quite recent. Contrary to what was believed during the new economy boom, the increasing use of ICT is primarily a phenomenon within firms; the contribution of restructuring to the observed changes in aggregate ICT-intensity is rather marginal. Decompositions of productivity growth suggest, however, that experimentation and selection are quite intense among young ICT-intensive firms. After controlling for industry and time effects as well as labour and other firm-level characteristics, the additional productivity of ICT-equipped labour ranges from 8% to 18% corresponding to roughly a 5% to 6 % elasticity of ICT capital. The effect is much higher in younger firms and in ICT-providing activities. The finding for firm age is consistent with the need for ICT-complementing organisational changes. The finding for ICT-providing activities is not driven by the communications equipment industry but rather by ICT services. Overall, the excess productivity induced by ICT seems to be somewhat higher in services than in manufacturing. Manufacturing firms benefit in particular from ICTinduced efficiency in internal communication (linked to use of local area networks or LANs) whereas service firms benefit from efficiency in external (Internet) communication. We find weak evidence for the complementarity of ICT and education.

    Original languageEnglish
    Title of host publicationThe Economic Impact of ICT
    Subtitle of host publicationMeasurement, Evidence and Implications
    Number of pages27
    ISBN (Electronic)978-92-64-02678-0
    ISBN (Print) 92-64-02103-5
    Publication statusPublished - 2004
    MoE publication typeA3 Part of a book or another research book


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