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Investing in information technology: productivity payoffs for U.S. industries

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  • Kevin J. Stiroh

Abstract

Although firms have invested billions of dollars in information technology to boost their productivity, many analysts continue to question whether these investments do in fact lead to productivity gains. An industry-level analysis of productivity performance provides robust evidence of a link, showing that the industries experiencing the largest productivity acceleration in the late 1990s were the producers and most intensive users of information technology.

Suggested Citation

  • Kevin J. Stiroh, 2001. "Investing in information technology: productivity payoffs for U.S. industries," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 7(Jun).
    • Handle: RePEc:fip:fednci:y:2001:i:jun:n:v.7no.6
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    References listed on IDEAS

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    1. Dale W. Jorgenson & Kevin J. Stiroh, 2000. "Raising the Speed Limit: U.S. Economic Growth in the Information Age," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 31(1), pages 125-236.
    2. Erik Brynjolfsson & Lorin M. Hitt, 2000. "Beyond Computation: Information Technology, Organizational Transformation and Business Performance," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 23-48, Fall.
    3. Martin Neil Baily & Robert J. Gordon, 1988. "The Productivity Slowdown, Measurement Issues, and the Explosion of Computer Power," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 19(2), pages 347-432.
    4. William D. Nordhaus, 2002. "Productivity Growth and the New Economy," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 33(2), pages 211-265.
    5. Karl Whelan, 2002. "Computers, Obsolescence, And Productivity," The Review of Economics and Statistics, MIT Press, vol. 84(3), pages 445-461, August.
    6. Kevin J. Stiroh & Dale W. Jorgenson, 1999. "Information Technology and Growth," American Economic Review, American Economic Association, vol. 89(2), pages 109-115, May.
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    Cited by:

    1. Benoit Aubert & Blaize Horner Reich, 2009. "Extracting Value From Information Technologies," CIRANO Burgundy Reports 2009rb-04, CIRANO.
    2. H Seol & H Lee & S Kim & Y Park, 2008. "The impact of information technology on organizational efficiency in public services: a DEA-based DT approach," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 59(2), pages 231-238, February.
    3. Fred V. Carstensen & William F. Lott & Stan McMillen, 2003. "The Economic Impact of Connecticut's Information Technology Industry," CCEA Studies 2003-02, University of Connecticut, Connecticut Center for Economic Analysis.
    4. Beckstead, Desmond Gellatly, Guy, 2003. "The Growth and Development of New Economy Industries," The Canadian Economy in Transition 2003002e, Statistics Canada, Economic Analysis Division.
    5. Chee Kong Wong, 2004. "Information Technology, Productivity and Economic Growth in China," Economics Discussion / Working Papers 04-21, The University of Western Australia, Department of Economics.
    6. Hélène Baudchon & Olivier Brossard, 2003. "Definitions and Measures of ICT Impact on Growth: What is Really at Stake?," Documents de Travail de l'OFCE 2003-01, Observatoire Francais des Conjonctures Economiques (OFCE).
    7. Oliner, Stephen D. & Sichel, Daniel E. & Stiroh, Kevin J., 2008. "Explaining a productive decade," Journal of Policy Modeling, Elsevier, vol. 30(4), pages 633-673.
    8. Park, Mi-Hee & Koo, Won W., 2005. "Recent Development in Infrastructure and Its Impact on Agricultural and Non-agricultural Trade," 2005 Annual meeting, July 24-27, Providence, RI 19525, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Margaret Antonicelli & Michele Rubino & Filomena Maggino, 2023. "Demographic and Economic Determinants of Digitalization in Healthcare: An Exploratory Analysis of the Italian Local Health Centers," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 169(1), pages 529-552, September.
    10. Di Tommaso, Marco R. & Prodi, Elena & Pollio, Chiara & Barbieri, Elisa, 2023. "Conceptualizing and measuring “industry resilience”: Composite indicators for postshock industrial policy decision-making," Socio-Economic Planning Sciences, Elsevier, vol. 85(C).

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