Impact of ICT diffusion and adoption on sectoral industrial performance: evidence from a panel of European countries

The rapid diffusion of information and communication technologies has been a fixture of the international landscape over the past decade and has stimulated ample debate. However, our understanding of the different aspects of the digital revolution is still far from complete. This paper focuses on European countries and investigates the effects on industrial performance of ICT diffusion and adoption by considering dimensions that the literature has long neglected, such as the affordability, availability, usage, and empowerment of ICTs by both firms and households. Our results, obtained by estimating augmented production functions at the sectoral level in a simultaneous equation framework, show that the impact of e-inclusion is remarkable, but varies substantially across sectors and type of measure considered.