What has been the quantitative effect on productivity growth of information and communication
technology (ICT) in Europe after 1995? Based on a multi-country sectoral panel data
set, we provide econometric evidence of positive and significant productivity effects of ICT in
Europe, mainly due to advances in total factor productivity. In contrast to the US, this impact
of ICT has happened against a negative macro economic shock not related to ICT. Our main
result is in contrast to the established consensus in the growth accounting literature that there
has been no acceleration of productivity growth in Europe, mainly due to the performance of
ICT-using sectors. One important advantage of using econometric methods is that we can distinguish
between growth effects from ICT and macro economic shocks; a feature that growth
accounting methods cannot handle
