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IT and Beyond: The Contribution of Heterogeneous Capital to Productivity

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  • Wilson, Daniel J.

Abstract

This article explores the relationship between capital composition and productivity using a unique, detailed dataset on firm investment in the United States in the late 1990s. I develop a methodology for estimating the separate effects of multiple capital types in a production function framework. I back out the implied marginal products of each capital type and compare these with rental price data. I find that although most capital types earned normal returns, information and communications technology capital goods had marginal products substantially above their rental prices. The article also provides evidence of complementarities and substitutabilities among capital types and between capital types and labor.

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File URL: http://pubs.amstat.org/doi/abs/10.1198/jbes.2009.0005
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Bibliographic Info

Article provided by American Statistical Association in its journal Journal of Business and Economic Statistics.

Volume (Year): 27 (2009)
Issue (Month): ()
Pages: 52-70

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Handle: RePEc:bes:jnlbes:v:27:y:2009:p:52-70

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Citations

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Cited by:
  1. Ortega-Argilés, Raquel & Piva, Mariacristina & Vivarelli, Marco, 2011. "The Transatlantic Productivity Gap: Is R&D the Main Culprit?," IZA Discussion Papers 5586, Institute for the Study of Labor (IZA).
  2. B. Atrostic, 2008. "Measuring U.S. innovative activity: business data at the U.S. Census Bureau," The Journal of Technology Transfer, Springer, vol. 33(2), pages 153-171, April.
  3. Sadaf Bashir & Bert Sadowski, 2014. "General Purpose Technologies: A Survey, a Critique and Future Research Directions," Working Papers 14-02, Eindhoven Center for Innovation Studies, revised Feb 2014.
  4. Daniel J. Wilson, 2004. "Investment behavior of U.S. firms over heterogeneous capital goods: a snapshot," Working Paper Series 2004-21, Federal Reserve Bank of San Francisco.
  5. Michelle Alexopoulos, 2010. "Read All About it!! What happens following a technology shock?," Working Papers tecipa-391, University of Toronto, Department of Economics.
  6. Raquel Ortega-Argilés, 2012. "The Transatlantic Productivity Gap: A Survey Of The Main Causes," Journal of Economic Surveys, Wiley Blackwell, vol. 26(3), pages 395-419, 07.
  7. Catherine L. Mann, 2012. "Information Technology Intensity, Diffusion, and Job Creation," Working Papers 46, Brandeis University, Department of Economics and International Businesss School.

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