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Productivity, technological innovations and broadband connectivity: firm-level evidence for ten European countries

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Abstract

This study investigates the link between productivity and innovations (technological as well as non-technological), taking into account the information and communication technology (ICT) intensity of firms, measured as the proportion of broadband internet connected employees. The analysis is based on official firm-level data on innovation activities and ICT usage in firms for the years 2002–2010, linked to the business registers and the production statistics in ten European countries. The datasets encompass 117,000 firm-year observations. Estimation results reveal that firm productivity is significantly related to product innovations, but to a lesser extent than broadband connected employees. The strength of the association varies across countries and between manufacturing and service firms. As a contrast, process, marketing and organizational innovations are not significantly related to productivity in the majority of countries. Overall, broadband usage appears to be a better predictor of productivity than product innovations.

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Notes

  1. See https://ec.europa.eu/eurostat/cros/content/esslait-0_en.

  2. See http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database.

  3. See http://www.euklems.net and http://www.wiod.org.

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Author information

Authors and Affiliations

  1. Vrije Universiteit, Amsterdam, The Netherlands

    Eric J. Bartelsman

  2. Tinbergen Institute, Amsterdam, The Netherlands

    Eric J. Bartelsman

  3. Austrian Institute of Economic Research (WIFO), Vienna, Austria

    Martin Falk

  4. University of Iceland, Reykjavík, Iceland

    Eva Hagsten

  5. Statistics Netherlands, The Hague, The Netherlands

    Michael Polder

Authors
  1. Eric J. Bartelsman
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  2. Martin Falk
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  3. Eva Hagsten
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  4. Michael Polder
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Corresponding author

Correspondence to Eva Hagsten.

Additional information

This study was initiated within the frame of the Eurostat funded project ESSLait (Grant Agreement 50721.2013.001-2013.082). The second author acknowledges financial support from the Austrian National Bank (Jubiläumsfond Grant Number 16524).

Appendix

Appendix

See Fig. 1.

Fig. 1
figure 1

Source: ESSLait project

Compilation of the harmonized and merged datasets

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Bartelsman, E.J., Falk, M., Hagsten, E. et al. Productivity, technological innovations and broadband connectivity: firm-level evidence for ten European countries. Eurasian Bus Rev 9, 25–48 (2019). https://doi.org/10.1007/s40821-018-0113-0

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