Development of Information Technology Industry and Sources of Economic Growth and Productivity in Korea

Abstract

Thisstudy analyzes the developmentofthe information technology(IT)industry in Koreain the1971-2000period and examinesthesourcesofKorea's economic growth and productivity during that period. Anattemptismade toexamine thecontribution ofinputtooutputgrowthon the basis ofthe standard growth accounting framework. The studyalso analyzesthe sourceofproductivity growth based on theproductionfunction framework,drawing attention to the role that IT capital mayhave played. The main ndings are that IT capital is not only an im-portant factor on the out growth in the shortrun,but a positive eecton the long run change oflaborproductivity. The contribution ofIT toGDP growth comesfrom IT capital deepening rather than the increasein TFP growth.