An international comparison on TFP changes in ICT industry

An International Comparison on
TFP Changes in ICT Industry
among China, Korea, Japan, Taiwan
and the United States
Chi-Yuan Liang, Ruei-He Jheng
National Central University
Chung-Hua Institution for Economic Research
The Fifth World KLEMS Conference
June 4-5, 2018
1

Contents
I. Introduction
II. Methodology
III. Data Compilation
IV. Empirical Results
V. Conclusions
2

 The total output value of ICT (information and communication
technology) in the United States, Japan, Korea, China and Taiwan was
USD 490.5 billion, 400 billion, 321.4 billion, 896.7 billion and 240.5
billion respectively in 2009/2010.
 China, Korea and Taiwan registered a remarkable annual growth rate of
24.1 percent, 16.7 percent and 12.8 percent respectively during 1981-
2010 in ICT industry, while that of the United States and Japan was 7.5
percent and 6.1 percent respectively in the same period.
 It is important to analyze the source of growth in ICT industry among
the above five countries.
 China, Korea and Taiwan seems to be catching up quickly with Japan
and the United States in terms of total output value.Whether it is also
true that China, Korea and Taiwan are also catching up Japan and the
United States in the “total factor productivity or TFP gap” is worthy of
study.
4

 Purposes of this paper are:
1) To measure the TFP growth and analyze the sources of ICT
growth in Taiwan during 1981-2010, because it is not
available in either World KLEMS Database or Asia KLEMS
Database.
2) To compare the sources of growth and TFP growth of ICT
industry among China,Taiwan, Korea, Japan and the United
States.
3) To measure the “TFP gap” of ICT industry among the above
five countries during 1981-2010.
 The methodology and data compilation employed is
the same as World KLEMS and Asia KLEMS.
5

 Following the methodology of World KLEMS and Asia KLEMS, we
measure sector-level productivity by using the translog
production function:
 which is characterized by CRS if, and only if, the parameters satisfy
the condition of coefficient characteristics.
7
(1)
2
1
ln
)
(ln
2
1
ln
ln
ln
)
(ln
2
1
ln
ln
ln
ln
ln
)
(ln
2
1
ln
ln
ln
ln
ln
ln
ln
)
(ln
2
1
ln
ln
ln
ln
ln
2
2
2
2
2
0
T
MT
M
ET
M
E
E
LT
M
K
E
L
L
KT
M
K
E
K
L
K
K
M
E
L
K
T
Q
TT
LT
EE
ET
EM
EE
LT
KM
LE
LL
KT
KM
KE
KL
KK
M
E
L
K
T

















































 In addition, for a well-behaved function the production should be
satisfied by the concavity constraint. That is, that the Hessian’s
matrix is negative semi-definite. Differentiating equation (1) with
respect to K, L, E, M and T, the value-share equations of capital,
labor, energy and intermediate can be expressed as:
 In addition, the rate of change inTFP can be shown as:
8
(2)
ln
ln
ln
ln T
M
E
L
K
S KT
KM
KE
KL
KK
K
K 




 





(3)
ln
ln
ln
ln T
M
E
L
K
S LT
LM
LE
LL
LK
L
L 




 





(4)
ln
ln
ln
ln T
M
E
L
K
S ET
EM
EE
EL
EK
E
E 




 





(5)
ln
ln
ln
ln T
M
E
L
K
S MT
MM
ME
ML
MK
M
M 




 





(6)
ln
ln
ln
ln T
M
E
L
K
R TT
MT
ET
LT
KT
T
T 




 






For the data at any two discrete points in time, say T and T-1, the
average rate of TFP change can be derived from growth accounting,
i.e., the difference between successive logarithms of output less a
weighted average of the differences between successive logarithms of
capital, labor, energy and intermediate inputs with weights given
based on average value shares:
The index of (7) is referred to as the Tornqvist index of TFP or the
translog index of TFP.
(8)
,
,
,
=
)]
1
(
)
(
[
2
1 M
E
L
K
i
T
s
T
s
s i
i
i 


9
(7)
)]
1
(
ln
)
(
[ln
)]
1
(
ln
)
(
[ln
)]
1
(
ln
)
(
[ln
)]
1
(
ln
)
(
[ln
)
1
(
ln
)
(
ln















T
M
T
M
s
T
E
T
E
s
T
L
T
L
s
T
K
T
K
s
T
Q
T
Q
R
M
E
L
K
T
(9)
)]
1
(
)
(
[
2
1 

 T
R
T
R
R T
T
T

3.1 Data Compilation of Taiwan
11
 We do not use the data of Taiwan in Asia KLEM
database because we have our own consistant
database, starting from 1961 to 2016.
 The observation period of this study runs from 1981
to 2010. For comparison, we divide it into four sub-
periods such as 1981-1990, 1990-1999, 1999-2007
and 2007-2010.
 The data of factor input and output were compiled as
follows:

3.1.1 Capital Input
Capital input can be decomposed into seven categories:
 (K1) buildings
 (K2) other buildings
 (K3) transportation equipment
 (K4) machineries
 (K5) inventory
 (K6) land
 (K7) intelligent investment
12

 Except for land, the time series capital stock in 1961-
2010 is calculated by adding up the net capital
formation, which is the difference between the gross
capital formation and the depreciation, starting from
1951 - the beginning year of the National Income
Account in Taiwan.
 The gross capital formation during 1951-2010 comes
from the DGBAS; the types of depreciation are
compiled by employing the constant rate depreciation
method and the asset lives listed in the National
Wealth Census.
13

 This method implicitly assumes that no net capital
stock existed before 1951. The time-series land data
come from the Industrial and Commercial Census in
every five-year by applying interpolation/extrapolation
method.
 We then used the data on various types of capital stock
obtained from the National Wealth Census in 1988,
DGBAS as a reference to adjust the time-series capital
stock aforementioned.
14

The types of capital service prices are compiled by using the
following equation of Christensen-Jorgenson (1969, 1970):
By using the constant rate of depreciation method, the present
value of depreciation in relation to a dollar of investment good i is
calculated by means of the following equations:
The data on Ni and r come from the National Wealth Census (1988)
and Financial Statistics Monthly, respectively.
, 1,2,3,4)
=
(i
(T)
(T)
P
+
1))]
-
(T
P
-
(T)
P
(
-
(T)
P
+
(T)
R
(T))
-
(1
1)
-
(T
P
[
(T)
-
1
(T)
Z
(T)
-
1
=
P
i
Ii
Ii
Ii
Ii
i
r
Ii
i
ki










)
0.1c
=
s
(given
)
c
s
(
-
1
= i
i
i
i
N
1
i
i
 ]
)
r
+
(1
)
-
(1
[
=
(T)
Z i
i
N
i
1
-
N
i
i

 

15

 The deflator in relation to capital i is the quotient of the gross capital
formation at current prices and the gross capital formation at constant
2011 prices. Both of these are provided by the Statistics Bureau of the
DGBAS.
 Based on the corresponding tax code, tax rates for property (Zi (T)),
buildings (K1), and other buildings (K2) are assumed to be 3.0 percent.
That for land (K6) is assumed to be 1.5 percent. No property tax is
levied on machineries (K4), inventory (K5) and intelligent investment
(K7). The property tax rate with regard to the transportation
equipment (K3) is calculated as:
 The property tax rate with regard to the transportation equipment (K3)
is calculated as:
residents
all
of
equipment
ation
transport
the
of
value
the
-
prices
current
at
3
cars
mobile
for
revenue
license
The
3 K
K 
16

The internal rate of return (Rr (T)) is calculated by:
Where PC denotes the property compensation, which is the sum of rent, interest
and profit depreciation, and is equal to the summation of the products of Ki
and Pk
:
Since the production of unpaid workers tends to be omitted from the survey of
National Income and Product Accounts, especially in agriculture or in the quarrying
industries and so on, we adjust and calculate this value by using the Input-Output
Table for various years (i.e.1976,1978,1986,1991,1996, 2001, 2006, 2011).
We interpolate and extrapolate the input-output tables to obtain the time-series
SK
and SL
for adjusting the SK
and SL
series obtained from the National Income
Account.
1)
-
(T
K
1)
-
(T
P
(T))
Z
(T)
-
(1
K
(T))]
P
-
(T)
P
(
(T)
-
1
(T)
Z
(T)
-
1
[
-
PC
=
(T)
R
i
Ii
i
6
=1
i
i
Ii
Ii
i
6
=1
i
r












1)
-
(T
K
P
=
PC i
K
6
=1
i
i


17

 Besides, the data of intelligent investment is also sorting from
DGBAS. We compile the nominal value and real value of
intelligent investment for each service sectors and then
calculating the deflator of intelligent investment.
 Furthermore, the beginning year of intelligent investment is 1981
and the depreciation period is 11 years that followed by DGBAS.
 And hence we also adopt perpetual inventory method and
calibrate by Industry, Commerce and Service Census in 2011.
18

3.1.2 Labor Input
72 categories of labor for each industry are classified on
the basis of:
 Sex
(a) Male (b) Female
 Employment Status
(a) Employed (b) Self-employed and/or unpaid family worker
 Age
(a) 15-24 (b) 25-34 (c) 35-44 (d) 45-54 (e) 55-64 (f) over 65
 Education
(a) Junior high school graduate or less
(b) Senior or vocational high school graduate
(c) College graduate and above
19

 Wages and labor inputs on the basis of 72 categories
during 1981-2010 are compiled from the magnetic
tape of the Manpower Survey, DGBAS; total
employment is from Manpower Survey, DGBAS and
wage comes from Labor product and Wage Monthly,
DGBAS.
 We further incorporate the data of working hour
during 1981-2010 into the labor input estimation.
20

3.1.3 Energy Input
 Energy input consists of coal, oil products, natural gas, and
electricity.We calculated the translog index of energy input.
 The quantities of energy consumed are available in Energy
Balance in Taiwan, R.O.C., issued by the Energy Commission,
MOEA.
 Cost shares of types of energy are calculated by using the
energy consumption data mentioned above and the data on
prices of types of energy.The price data of domestic coal come
from Commodity Price Monthly DGBAS, and Import-Export
Trade Monthly, MOF.
 The price of oil, LNG and electricity are sorting from CPC and
Taipower Company.
21

3.1.4 Intermediate Input
 The intermediate inputs are split into five categories:
agricultural, industrial, transportation, services and
imports intermediate input.
 The value and value share of intermediate input as a
whole comes from the National Income Account.
 Since the data on intermediate input in the National
Income Account includes energy input, we subtract the
value of energy input from the value of intermediate
input.
 Furthermore, the intermediate input deflator of
agricultural, industrial, transportation, and services is
obtained from DGBAS and the imports intermediate
input deflator is collected from Ministry of Finance.
22

3.1.5 Real Value Added and Total Output
 The time series for total output and value added at
nominal prices during 1981-2010 come from the
DGBAS.
 However, real total output and real value added of ICT
industries are calculated by nominal total output and
nominal value added (excluding tax) deflated with total
output deflator and value added deflator respectively.
 The above two deflators are provided by DGBAS.
23

3.2 Data Compilation of Other countries
24
 The data of total output, capital input, labor input and
intermediate input (including energy intermediate input
and non-energy intermediate input) , and growth rate of
TFP in China, Japan, Korea and the United States are
obtained from World KLEMS Database, Asia KLEMS
Database and China Industrial Productivity (CIP)
Database 3.0.
 The relative TFP of ICT industries in 1995, which are
employed to measure the “TFP gap” among five countries
come from Motohashi(2007).

4.1 The Growth Rate of Total Output in ICT
Industries (1981-2010)
 According to the database of World KLEMS and Asia KLEMS, the total
output value of ICT (information and communication technology) in the
United States, Japan Korea, China and Taiwan was USD 490.5 billion, 400
billion, 321.4 billion, 896.7 billion and 240.5 billion respectively in
2009/2010.
 Table 1 presents the international comparison on growth rate of total
output (Q), various inputs and TFP. From Row 1, Table 1, the following
important conclusions emerge:
1. China had the highest growth rate in total output (Q) of during 1981-2010
among five countries (24.1 percent). Korea ranked next (16.7 percent),
followed by Taiwan1(2.8 percent), the United States (7.5 percent) and Japan
(6.1 percent). (see Row 1,Table 1)
2. The United States’ growth rate had peaked since 1999. It dropped to -0.5
percent per annum during 2007-2010. (see Row 1,Table 1)
3. Japan’s deceleration came even earlier. It started from 1990. It fell to -11.0
percent during 2007-2010. (see Row 1,Table 1)
26

4.2 The Growth Rate of Capital (K), Labor (L) and
Intermediate Input(M) in ICT Industries during 1981-2010
From Row 2 to Row 4 of Table 1, we concluded that:
1. China had the highest growth rate of capital input (17 percent)
during 1981-2010. The followings were Taiwan (15.5
percent) ,Korea (13.2 percent), Japan (7.4 percent) and the United
States (4.8 percent). (see Row 2,Table 1)
2. It is worth of noting that the capital input growth rate of the above
five countries are fell sharply during 2007-2010. (see Row 2,Table
1)
3. Comparing with the growth of capital input, the labor input growth
rate was lower in all countries except China. China was the highest
country with an annual growth rate of 8.2 percent during 1981-
2010, followed by Taiwan (6.0 percent), Korea (3.9 percent), Japan
(0.6 percent) and the United States (-1.2 percent). (see Row 3,
Table 1)
27

4. It is noted that the labor input of Japan and the United States registered
negative growth since 1999.The labor input of ICT decrease 2.0 percent per
annum and 3.4 percent per annum respectively in Japan and the United States.
(see Row 3,Table 1)
5. Compared with Japan and the United States, China and Korea had much
higher growth rate in intermediate input during 1981-2010. China and Korea
grew with a pace of 24.9 percent per annum and 16.7 percent per annum in
intermediate input respectively, while Taiwan increased with 12.3 percent per
annum. (see Row 4,Table 1)
6. In contrast, Japan and the United States’ intermediate input grew with a pace
of 4.0 percent per annum and 1.3 percent per annum respectively during
1981-2010. (see Row 4,Table 1)
7. Compared with the growth rate of sub-periods, during the same period of
1981-2010, all of the countries decelerated in intermediate inputs growth
except Korea. The annual growth rate of intermediate input in Taiwan
decrease from 10.0 percent during 1981-1990 to 5.2 percent during 2007-
2010.That of Japan and the United States sharply declined from 10.7 percent
and 4.0 percent during 1981-1990 to -10.9 percent and -14.8 percent during
2007-2010. (see Row 4,Table 1)
28

Table 2 present the sources of total output growth and the relative contribution
ratio of capital, labor and intermediate input to total output growth, respectively in
ICT industries during 1981-2010.Table 2 is calibrated from Table 1. From Table 2, we
concluded that:
1. The relative contribution ratio of capital input to total output growth during
1981-2010,Taiwan ranked the first (13.0 percent), while Japan (11.64 percent)
ranked the second. Korea, the United States and China ranked the third (10.25
percent), the fourth (7.57 percent) and the fifth (7.4 percent) respectively. (see
Row 2,Table 2)
2. The relative contribution ratio of labor input to total output growth during
1981-2010, all of the five countries were lower than 7.0 percent. Taiwan was
6.7 percent and followed by China (4.5 percent), Korea (3.0 percent), Japan
(2.5 percent) and the United States (-5.0 percent). (see Row 3,Table 2)
3. The relative contribution ratio of intermediate input to total output was very
high in China (78.7 percent), Korea (74.06 percent) and Taiwan (72.87 percent)
during 1981-2010. Conversely, that of Japan and the United States was 43.43
percent and 9.8 percent respectively. (see Row 4,Table 2)
29
4.3 The Sources of Total Output Growth

4.4 The Growth Rate of TFP(1981-2010)
From Row 5 of Table 1 and Table 2, the following important
conclusions emerge:
1. For the whole observation period (1981-2010), the United States had the
highest TFP growth of 6.2 percent per annum, followed by Japan (2.4 percent),
Korea (2.0 percent), China (2.0 percent) and Taiwan (0.8 percent). (see Row 5,
Table 1)
2. Comparing with the growth rate of sub-periods, we found that TFP growth of
the United States and Taiwan had accelerated.The annual TFP growth rate of
the United States increased from 3.8 percent during 1981-1990 to 8.3 percent
during 2007-2010, and that of Taiwan increased from -0.3 percent during 1981-
1990 to 3.0 percent during 2007-2010. (see Row 5,Table 1)
3. In contrast, Japan, Korea and China had a trend of deceleration in the TFP
growth. The annual TFP growth rate of , Korea and China declined from 3.0
percent,1.6 percent and 3.2 percent respectively during 1981-1990 to -2.3
percent, 1.1 percent and -0.7 percent respectively during 2007-2010. (see Row
5,Table 1)
30

4. During 1981-2010, the relative contribution ratio of TFP to total output
growth was the greatest in the United States (87.9 percent), Japan ranked
the second (42.4 percent), followed by Korea (13.1 percent), China (9.4
percent) andTaiwan (7.4 percent). (see Row 5,Table 2)
5. However, the relative contribution ratio of TFP to total output increased
in the United States and Taiwan, while it decreased in China, Korea and
Japan. For example, the relative contribution ratio of TFP to total output
growth in Taiwan increased from -2.2 percent during 1981-1990 to 41.9
percent during 2007-2010. (see Row 5,Table 2)
6. Due to various TFP growths among countries, the TFP gap in ICT
industry between the United States and the rest of four countries got
wider during the whole observation period of 1995-2010 (see Figure 1).
31

7. The relative ICTTFP of China, Japan, Korea, Taiwan and the United
States were 0.68, 1, 0.76, 0.79 and 0.93 respectively in 1995. However,
due to the different growth rate ofTFP among five countries,The relative
ICTTFP of China, Japan, Korea, Taiwan and the United States were 0.78,
1.06, 0.91, 0.77 and 1.43 respectively in 2000.
8. And the TFP gap in ICT industry between Japan, Korea andTaiwan got
wider during 2003-2007 and gradually narrowed after 2008 (see Figure
1).
9. The TFP gap in ICT industry between Korea andTaiwan got wider during
1995-2004 and gradually narrowed after 2005 (see Figure 1).
10. The TFP gap in ICT industry between China and other countries got
wider after 2005 (see Figure 1).
32

Table 1 An International Comparison on Growth Rate
of Total Output, Capital, Labor, Intermediate Input
and TFP by Countries, 1981-2010
33
Unit: %
1981-2010 1981-1990 1990-1999 1999-2007 2007-2010
Taiwan
Korea
Japan
China
U.S.
Taiwan
Korea
Japan
China
U.S.
Taiwan
Korea
Japan
China
U.S.
Taiwan
Korea
Japan
China
U.S.
Taiwan
Korea
Japan
China
U.S.
Q 12.8 16.7 6.1 24.1 7.5 13.8 20.9 12.9 20.3 7.1 14.1 13.8 4.1 31.9 14.0 12.4 16.5 5.6 24.3 4.0 7.4 13.7 -11.0 13.1 -0.5
K 15.5 13.2 7.4 17.0 4.8 14.8 16.8 14.2 11.8 6.5 20.7 9.5 4.7 17.8 7.6 16.5 15.4 4.7 21.6 1.6 1.0 8.2 0.9 18.8 0.0
L 6.0 3.9 0.6 8.2 -1.2 8.4 11.3 4.8 5.5 0.6 5.2 -1.0 -0.6 7.7 -0.3 5.3 1.2 -0.3 11.8 -3.4 3.3 4.6 -8.4 8.6 -3.5
M 12.3 16.7 3.9 24.9 1.3 14.7 20.5 10.0 21.1 4.0 14.3 13.4 2.8 32.7 9.7 10.0 17.1 2.4 25.3 -4.2 5.2 14.4 -10.7 13.5 -14.8
TFP 0.8 2.0 2.4 2 6.2 -0.3 1.6 3.0 2.6 3.8 0.3 3.2 1.7 3.2 6.7 1.9 1.3 3.9 0.7 7.4 3.0 1.1 -2.3 -0.2 8.3
Source: Database of CIP Database,World KLEMS and Asia KLEMS, calculated by the article.

Table 2 The Relative Contribution Ratio of Capital,
Labor, Intermediate Input and TFP to Total Output
Growth by Countries, 1981-2010
34
Unit: %
1981-2010 1981-1990 1990-1999 1999-2007 2007-2010
Taiwan
Korea
Japan
China
U.S.
Taiwan
Korea
Japan
China
U.S.
Taiwan
Korea
Japan
China
U.S.
Taiwan
Korea
Japan
China
U.S.
Taiwan
Korea
Japan
China
U.S.
Q 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100
K 13.0 10.3 11.6 7.4 7.6 8.4 9.4 8.7 5.5 7.7 14.0 8.7 11.1 8.2 6.1 16.8 13.9 8.8 7.9 4.6 2.4 7.7 -1.1 7.9 -0.1
L 6.7 3.0 2.5 4.5 -5.0 12.1 7.9 9.3 5.4 2.7 5.1 -1.0 -3.4 2.5 -0.7 4.7 0.8 -1.1 4.8 -24.7 3.6 3.4 17.8 7.2 215.0
M 72.9 74.1 43.4 78.7 9.8 81.8 72.3 55.9 73.6 33.3 77.9 71.5 48.7 76.4 42.5 61.8 76.5 21.8 84.6 -62.0 51.1 81.4 63.0 85.7 1,206.7
TFP 7.4 13.1 42.4 9.4 87.9 -2.2 9.1 26.1 15.6 56.1 3.0 24.0 43.6 12.8 52.0 16.7 8.9 70.5 2.8 182.5 41.9 9.1 20.3 -0.8 -1,326.3
Source: Database of CIP Database,World KLEMS and Asia KLEMS, calculated by the article.

Figure 1 Trend of TFP Growth by Countries
(1995-2010)
35
Source: Database of CIP Database, Database of World KLEMS and Asia KLEMS, Motohashi (2007),
calculated by the article.
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
Taiwan Korea Japan US China

4.4 TFP and the Value Added Ratio
Comparing to the United States and Japan, China,Taiwan and
Korea had lower TFP level. It might lead to lower value added
ratio in China,Taiwan and Korea.
The value added ratio of ICT industry in Taiwan and Korea was
16.53 percent, 20.55 percent and 22.7 percent respectively in
2010. In contrast, that of Japan and the United States was 34.53
percent and 62.98 percent respectively. (see Figure 2)
36

Figure 2 Value Added Ratio of ICT industry by
Countries in 2010
37
Source: OECD.stat, calculated by this article.
Note: the value of Japan is 2009 and the data of China was estimated by this article.
China Taiwan Korea Japan US
0
10
20
30
40
50
60
70
16.53
20.55
22.70
34.53
62.98
%

Why TFP of ICT industry is different among the United States,
Japan, Korea and Taiwan is worthwhile of further study.
According to Liang(2009), Taiwan’s TFP changes for the whole
economy was affected by R&D, among the other factors such as
infrastructure, exchange rate, industrial policy and so on.
International comparison on R&D expense of ICT industry in
total output is presented in Figure 3. From Figure 3, we found
that lower R&D expense might provide a clue to lower TFP in
Taiwan and Korea, compared to the United States and Japan.The
R&D expense in total output of ICT industry in Taiwan and
Korea was 2.81 percent and 4.42 percent respectively during
1987-2010. Conversely, that of the United States and Japan was
8.01 percent and 9.66 percent respectively.
38

Figure 3 Average R&D Expense in Total Output
Value of ICT industry by Countries (1987-2010)
39
Source: OECD.stat, calculated by this article.
Note: the value of Japan is 1987-2009 and the database dose not contain China.

Conclusions
1. The annual growth rate of total output in China, Korea
and Taiwan were 24.1 percent, 16.7 percent and 12.8
percent respectively during 1981-2010, while that of the
United States and Japan was 7.5 percent and 6.1
percent respectively in the same year.
2. The growth rate of TFP of ICT industry in the United
States, Japan, Korea, China and Taiwan were 6.2 percent,
2.4 percent, 2 percent , 2 percent and 0.8 percent per
year respectively during 1981-2010 in ICT industry.
41

3. The relative contribution ratio of TFP of ICT industry in
US, Japan, Korea, China and Taiwan were 87.9 percent,
42.4 percent, 13.1 percent, 9.4 percent and 7.4 percent
respectively during 1981-2010 consequently, we
concluded that US. and Japan were TFP-driven; while
that of Korea, China and Taiwan were input-driven in
ICT industry during 1981-2010.
4. It is worth noting that contrast with Korea, Taiwan’s
relative contribution ratio of TFP accelerated during the
latest period of 2007-2010, becoming the second
largest contributor to total output growth.
42

5. The TFP gap in ICT industry between the US and the rest of
four countries got wider during 1995-2010.
6. Japan’s TFP level continued to lead Korea,Taiwan and China in
the whole observation period of 1995-2010. However Japan’s
lead had gradually narrowed after 2007.
7. The TFP gap in ICT industry between Korea and Taiwan got
wider during 1995-2004 and remarkedly narrowed after 2004.
8. The TFP gap in ICT industry between China and other four
countries got wider after 2001.
9. Lower R&D expense in total output of ICT industry might
provide clue to lower TFP growth in Taiwan and Korea,
compared to that of the United States and Japan during 1981-
2010.
43

Thank you for your attention!
44

An international comparison on TFP changes in ICT industry

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