International comparisons of productivity growth
Subtitle: the role of information technology and regulatory practices
By: Christopher Gust, Jaime Marquez.
Contributors: Marquez, Jaime R.
Series: International finance discussion papers ;; no. 727; International finance discussion papers (Online) ;; no. 727.
Publisher: Federal Reserve Board
Published: 2002
Place of publication: Washington, D.C
Language: eng
Format: Electronic resource
Description: "While information technologies (IT) are credited with the recent acceleration in productivity in the United States, many other industrial countries have not experienced a pickup in productivity growth.  To explain this productivity divergence, we use panel data from 1992 to 1999 for 13 industrial countries and find that this divergence is driven in part by differences in both the production and adoption of information technologies.  Based on this finding, we proceed to investigate what factors might play a role in explaining differences in IT adoption.  Our results support the view that burdensome regulatory environments and in particular regulations affecting labor market practices have impeded the adoption of information technologies and slowed productivity growth in a number of industrial countries.  We then develop a theoretical model with vintage capital and labor to evaluate the effect of more stringent labor market regulations on a firm's decision to adopt new technologies.  We establish conditions under which a tax on firing workers delays the adoption of IT technology.  These conditions occur when technological change is skill-biased and a firm must upgrade the quality of its workforce through labor turnover.  The resulting delay in adopting IT technology then has negative implications for economy-wide productivity and is largely consistent with our empirical results"--Federal Reserve Board web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 10/14/2004.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.