This study investigates the relationship between digital adoption and labor productivity across two high-income European economies — Germany and Norway — over the period 2005 to 2025. Despite substantial theoretical consensus regarding the productivity-enhancing potential of digital technologies, empirical evidence remains fragmented, context-dependent, and methodologically inconsistent. This paper addresses that gap through a longitudinal, mixed-methods panel analysis combining macro-level national statistics with sector-level data. Utilizing fixed-effects panel regression, Granger causality tests, and structural equation modeling (SEM), the study examines how indicators of digital adoption — including broadband penetration, ICT capital investment, digital skills prevalence, cloud computing uptake, and e-government utilization — affect output per hour worked as a proxy for labor productivity. Key findings indicate that a one-percentage-point increase in broadband penetration is associated with a statistically significant 0.31%increase in labor productivity in Germany (p<0.01) and 0.44%in Norway (p<0.01). ICT capital investment emerges as the most robust predictor across both contexts. Critically, institutional capacity and digital skills moderate the adoption-productivity nexus, with Norway demonstrating systematically stronger returns to digitalization. The findings contribute to the sociotechnical systems theory and the general-purpose technology (GPT) framework, offering policy-relevant insights for European digital strategy.
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- Hussein Pabardja (Author), 2026, Does Digital Adoption Drive Labor Productivity?, Munich, GRIN Verlag, https://www.grin.com/document/1704642
