Computerization in France: An evaluation based on individual company data

In this article we evaluate the contribution of information and communication technologies (ICT) to the growth of value added during the past 15 years in France. Following North American studies, we use traditional growth accounting methods to assess the relative size of two types of contribution: on the one hand the effect of the use of information technologies (IT) on growth due to the accumulation of IT capital taking place within all industries; on the other hand the contribution of the production of ICT to growth due to the strong total factor productivity (TFP) gains achieved in the industries producing ICT. We use individual company data aggregated by industry, which provide us with a measure of the firm's computer stock and makes a detailed investigation possible. The contribution of the use of IT turns out to be significant around 0.3 of a point for an average annual value added growth of 2.6 percent during the period 1987-98. It is concentrated in a small number of industries that make an intensive use of computers. The contribution of the production of ICT is also substantial: 0.4 of a point over the same period. All in all, we evaluate the contribution of ICT in France at 0.7 of a point of annual growth during the period 1987-98. We also use the dual approach of growth accounting to evaluate the contribution of ICT to price evolutions. Our results show that the use of IT and the production of ICT have significantly reduced the value-added price inflation by 0.3 and 0.4 of a point respectively for an average annual price growth of 1.4 percent between 1987 and 1998.