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Does Economic Freedom Enhance the Impact of Technology on Global Productivity?
Abstract
A well-developed body of literature has detected positive effects of information technology (IT) investments on economic growth. We contribute to this literature by studying the joint effects of IT and economic freedom on productivity. Using two different time points, 1990 and 2000, as well as a sample of over 100 countries, we find that economic freedom enhances the effect of IT on productivity. In fact, we find that the standalone effect of freedom is not as large as its interactive effect with IT.
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