ICT as a general purpose technology: spillovers, absorptive capacity and productivity performance

We analyse the impact of ICT spillovers on productivity using company data for the U.S. We account for inter- and intra-industry spillovers and assess the role played by firm’s absorptive capacity. Our results show that intra-industry ICT spillovers have a contemporaneous negative effect that turns positive 5 years after the initial investment. For inter-industry spillovers both contemporaneous and lagged effects are positive and significant. In the short run, companies’ innovative effort is complementary to ICT spillovers, but such complementarity disappears with the more pervasive adoption and diffusion of the technology.