The effect of information technologies on labor productivity

Information and communications technology is an extended term for information technology that emphasizes the role of integration of unified communications, telecommunications, and computers, as well as necessary enterprise software, middleware. It enables users to access, store, transmit, understand and modify information. Some developed countries have benefited greatly from the adoption and use of ICT, both socially and economically. The literature on the subject emphasizes that these benefits depend on the existence of telecommunication infrastructures and economic development of these countries. The effect of information and communication technology on the improvement of productivity has been a subject of much debate in the literature. Theoretically, the impact of information and communication technology on productivity stems from the role these technologies play as inputs in the production process and their ability to reduce transaction costs and improve the coordination of different activities not only within the firm but also outside of business partners. In this study, in order to understand the effect of ICT on labor productivity, G7 countries were discussed and Panel Var analysis was conducted with the annual data of 1995-2018. While labor productivity is the dependent variable among the variables used in the analysis, variables such as foreign direct investments, fixed broadband subscription and GDP are positioned as independent variables. The result of the Panel Present Analysis, on the other hand, shows us some complex results, different from the literature. According to the Panel Var result, while economic growth, foreign direct investments and exports of information and communication technologies had a decreasing effect on labor productivity, the variable of the number of researchers and fixed broadband subscription variable had an effect on increasing labor productivity.