Ict, Innovation and Business Performance in Services: Evidence for Germany and the Netherlands

Using panel data for German and Dutch firms from the services sector, this paper analyses the importance of ICT capital deepening and innovation for productivity. We employ a model that takes into account that innovation and ICT use may be complementary. The results show that the contribution of ICT capital deepening is raised when firms combine ICT use and technological innovations on a more permanent basis. Moreover, the joint impact of ICT use and permanent technological innovation on productivity appears to be of the same order of magnitude in the two countries. However, the direct impacts of innovation on multi-factor productivity seems to be more robust for Germany than for the Netherlands.

Keywords: Productivity, Information and Communication Technologies, Innovation, Services, Panel Data

JEL Classification: C23, D24, L80, O32

Suggested Citation: Suggested Citation

Hempell, Thomas and Leeuwen, George van and Wiel, Henry van der, Ict, Innovation and Business Performance in Services: Evidence for Germany and the Netherlands (2004). ZEW - Centre for European Economic Research Discussion Paper No. 04-006, Available at SSRN: https://ssrn.com/abstract=545183 or http://dx.doi.org/10.2139/ssrn.545183