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Technical Efficiency and Productivity Change in the Korean ICT Industry Using Malmquist Index
Journal of Knowledge Information Technology and Systems
Abbr :
JKITS
2016, 11(1), pp.65-71
Publisher : Korea Knowledge Information Technology Society
Research Area : Interdisciplinary Research
2016, 11(1), pp.65-71
Publisher : Korea Knowledge Information Technology Society
Research Area : Interdisciplinary Research
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The ICT(Information and Communications Technologies) industry is recognised as an important growth engine for the national economy in that it could enhance the efficiency of enterprises and also improve the productivity of other industries. With the growing importance of ICT industry this study estimates and decomposes productivity changes into technical efficiency and technological change for the ICT industry in Korea and suggest implications to improve the productive efficiency. Unlike most previous studies using radial DEA models, the present study applies a non-radial Malmquist index which can deal directly with input excesses and output shortfalls. For the empirical analysis a panel data covering a period of six years from 2008 to 2013 is collected. The input variables are number of workers and capital. The gross output is used as the output variable. The empirical results show that the productivity of ICT industry has increased mainly due to improvement in technical efficiency rather than technological change. This implies that ICT industry development strategies should be implemented in order to improve productive efficiency as well as to strengthen technological innovation capability. It is expected that the findings of this study can be used in practice to enhance the competitiveness of ICT industry.
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