The influence of information and communication technology investments on productivity

: a panel data analysis

Abstract

In recent decades, new technologies have made tremendous progress, radically altering theway businesses produce and provide products and services. Information andcommunication technologies (ICT) are an important part of these technologicalinnovations. Nowadays, it is difficult to imagine most businesses without them,particularly in manufacturing, where ICT is used extensively. As a necessary consequence, the impact of different technologies on productivity is of great importance for researchers. In this thesis, I examine the impact of ICT equipment investments on total factor productivity (TFP) and labor productivity in the United States manufacturing sector. For this purpose, I use data from the United States Bureau of Labor Statistics from 1987 until 2020 to conduct a panel data analysis in R. The findings of this thesis demonstrate that capital investments in ICT have, in general, a positive impact on productivity over the studied period. The impact, however, is highly dependent on the respective subsector. ICT investments in high R&D-intensive subsectors have a greater positive impact than investments in low R&D-intensive subsectors. Furthermore, the COVID-19 pandemic in 2020 had no significant impact on the relationship between ICT and productivity. Consequently, this thesis contributes to a better understanding of the relationship between capital investments in ICT and productivity, as well as how new emerging technologies are affecting our economy.

Date of Award	27 Jan 2023
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Filipa de Almeida (Supervisor)