Productivity analysis of South Korean industrial sector

Abstract

This chapter presents empirical findings on industrial productivity changes in South Korea between 1980 and 2009, focusing on how investment in ICT and energy use, influence the productivity growth. A dynamic factor demand model is applied which allows for considerable flexibility in the choice of the functional form of the production technology, and in the expectation formation process. The objective is to estimate the production structure, and the demand for energy, materials, labors, ICT capital, and non-ICT capital for 30 South Korean industrial sectors. In particular the focus is on the ICT capital-energy use relationship, and the effect of this relationship on the TFP growth.