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Impact of ICT on the productivity of the firm: evidence from Turkish manufacturing

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Abstract

This paper aims to explore the impact of Information and Communication Technologies (ICT) on labor productivity growth in Turkish manufacturing. This is the first attempt at exploring the impact of ICT on productivity in Turkish manufacturing at the firm level. The analysis is based on firm level data obtained from Turkish Statistical Institute (TURKSTAT) and covers the period from 2003 to 2012. The data used in the analysis includes all firms employing 19+ workers in Turkish manufacturing industry. Growth accounting results show that the contributions of conventional and ICT capital to value added growth are not significantly different from each other. On the other hand, results based both on static (fixed-effects) and dynamic panel data analysis highlight the positive influence on firms’ productivity exerted by ICT capital. The findings show that the impact of ICT capital on productivity is larger by about 25 to 50% than that of conventional capital. This contribution of ICT capital is higher than that of non-ICT capital for small sized and low-tech firms. Our findings imply that investing in ICT capital increases firm productivity by increasing the productivity of labor and also that convention growth accounting approaches may not be adequate to identify such linkages.

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Notes

  1. For a detailed study, see Del Gatto et al. (2011).

  2. Zelenyuk (2014) provides a recent study on testing the significance of ICT contribution on the labor productivity

    distribution of developed countries in 1980–1995.

  3. In calculating the capital stock, in fact, we used three different depreciation rates: 7.5, 10, and 15%. However, results were quite comparable and we report only those based on the 7.5% depreciation rate.

  4. Number of employees is used as the size criterion. Establishments employing fewer than 50 people are classified as “small-sized enterprise” and establishments employing more than 50 and lower than 250 people are classified as “medium-sized enterprise”. “Large-scale enterprises” (LSE) employ 250 or more people.

  5. Classification of NACE Rev. 2 at 3-digit level industries according to technological intensity: (1) High technology intensive industries: basic pharmaceutical products and pharmaceutical preparations (21); computer, electronic and optical products (26); air and spacecraft and related machinery (30.3) (2) Medium technology intensive industries: chemicals and chemical products (20); fabricated metal products, except machinery and equipment (25); electrical equipment (27); machinery and equipment n.e.c. (28); motor vehicles, trailers and semi-trailers (29); other transport equipment (30 -excluding (30.3)); medical and dental instruments and supplies (32.5), reproduction of recorded media (18.2); coke and refined petroleum products (19); rubber and plastic products (22); other non-metallic mineral products (23); basic metals (24); repair and installation of machinery and equipment (33) (3) Low technology intensive industries: food products (10); beverages (11); tobacco products (12); textiles (13); wearing apparel (14); leather and related products (15); wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials (16); paper and paper products (17); printing and reproduction of recorded (18, excluding 18.2); furniture (31); other manufacturing (32, excluding 32.5) (http://epp.eurostat.ec.europa.eu/cache/ITY_SDDS/Annexes/htec_esms_an3.pdf)

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Acknowledgements

This study is a part of project BAP-1210E155 supported by the Scientific Research Commission of Anadolu University, Eskişehir, Turkey. We thank Turkish statistical Institute (TURKSTAT) for providing the firm level data and TURKSTAT staff for their help. All analyses have been conducted at the Microdata Research Centre of TurkStat with the respect to the protocol on the statistic secret and the personal data protection. The results and the opinions expressed in this article are exclusive responsibility of the Authors and, by no means, represent official statistics.

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Authors and Affiliations

  1. Department of Economics, Faculty of Economics, Anadolu University, Eskisehir, 26470, Turkey

    Yılmaz Kılıçaslan

  2. Department of Economics, Rice University, Houston, TX, USA

    Robin C. Sickles

  3. Department of Econometrics, Süleyman Demirel University, Isparta, Turkey

    Aliye Atay Kayış

  4. Department of Economics, Dokuz Eylül University, İzmir, Turkey

    Yeşim Üçdoğruk Gürel

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  1. Yılmaz Kılıçaslan
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Kılıçaslan, Y., Sickles, R.C., Atay Kayış, A. et al. Impact of ICT on the productivity of the firm: evidence from Turkish manufacturing. J Prod Anal 47, 277–289 (2017). https://doi.org/10.1007/s11123-017-0497-3

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