2.1.1. Labor Productivity (LP)

LP is defined as the desirable output (e.g., sales, production amount) per labor input (e.g., labor cost, hours worked) [24]. LP can be increased by reducing the labor input while maintaining the same amount of production or by increasing the production amount with the same labor input. In other words, LP is the inverted score of the labor input per unit of production, which represents the production of scale-adjusted labor input. In this study, LP is estimated by the gross output divided by labor compensation.

LP growth, in which ICT capital is typically used, was generally much higher and more volatile between 1995 and 2013 [4]. ICT capital contributes to productivity growth in labor-intensive industries because transaction costs, including information sharing among laborers, can be decreased due to ICT capital utilization [25]. However, the energy sector, which is a typical capital-intensive industry, has not been investigated with regard to the relationship between LP and ICT capital stock. In general, productivity in the energy sector is strongly related to energy efficiency, which is determined by the

technological level of equipment. Thus, this study assumes that the contribution of ICT capital to LP growth in the energy sector is limited.
