"Are we there yet?": an exploratory relationship between national information infrastructure expenditures, infrastructure development, and service-sector productivity

The worldwide scramble for information expenditures in order to gain productive advantage has been an issue of interest for both national policymakers and researchers. Yet little attention has been paid towards the dimensions of the productivity process, including the time lag between investments and returns. This paper illuminates the dimensions by disaggregating information investments into information expenditures and information infrastructure development. Based on past literature, this study uses service-sector productivity as a logical outcome of information expenditures. We contend that productivity follows a path from information expenditures through information infrastructure to service-sector productivity. A conceptual framework is developed and empirically examined using a time-lagged longitudinal dataset of 60 countries equally grouped into 3 income categories is then developed. The empirical examination reveals that information infrastructure development does indeed mediate the path between information investments and service sector productivity - supported by the discriminating evidence in the productivity path between the country categories. We finally discuss the results and implications.