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The Effect of Organizational Innovation and Information and Communications Technology on Firm Performance

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Author Info

  • Surendra Gera

    ()

  • Wulong Gu

    ()

Abstract

A key lesson from the U.S. literature on the impact of ICT on productivity is that ICT can only be effective if appropriate organizational structures are in place. This article by Surendra Gera of Industry Canada and Wulong Gu of Statistics Canada provides Canadian evidence to support this view. Using the Workplace and Employee Survey, the authors find evidence that firms that implement organizational changes and introduce ICT have a higher incidence of productivity improvement, increased sales and profits, and product and process innovation than firms that do not follow this path. Their findings suggest that to be successful firms typically need to adopt ICT as part of a system or cluster of mutualy reinforcing organizational approaches.

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File URL: http://www.csls.ca/ipm/9/gera_gu-e.pdf
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File URL: http://www.csls.ca/ipm/9/gera_gu-f.pdf
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Bibliographic Info

Article provided by Centre for the Study of Living Standards in its journal International Productivity Monitor.

Volume (Year): 9 (2004)
Issue (Month): (Fall)
Pages: 37-51

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Handle: RePEc:sls:ipmsls:v:9:y:2004:4

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Related research

Keywords: Productivity Growth; Productivity; Information and Communication Technologies; Information Technology; Firm-level; Firm Performance; Human Capital; Training; Management Practices; Organization; Organizational Change; Organizational Innovation; Process Innovation; Innovation;

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References

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  1. Sandra E. Black & Lisa M. Lynch, 2003. "What's driving the new economy?: the benefits of workplace innovation," Working Paper Series 2003-23, Federal Reserve Bank of San Francisco.
  2. Lisa M. Lynch & Sandra E. Black, 1995. "Beyond the Incidence of Training: Evidence from a National Employers Survey," NBER Working Papers 5231, National Bureau of Economic Research, Inc.
  3. Brynjolfsson, Erik. & Hitt, Lorin M., 1995. "Paradox lost? : firm-level evidence on the returns to information systems spending," Working papers 3786-95., Massachusetts Institute of Technology (MIT), Sloan School of Management.
  4. David Neumark & Peter Cappelli, 1999. "Do "High Performance" Work Practices Improve Establishment-Level Outcomes?," NBER Working Papers 7374, National Bureau of Economic Research, Inc.
  5. Brynjolfsson, Erik. & Hitt, Lorin M., 1994. "Information technology as a factor of production : the role of differences among firms," Working papers 3715-94. CCSTR ; #173., Massachusetts Institute of Technology (MIT), Sloan School of Management.
  6. Sabourin, David & Baldwin, John R. & Diverty, Brent, 1995. "Technology Use and Industrial Transformation: Empirical Perspectives," Analytical Studies Branch Research Paper Series 1995075e, Statistics Canada, Analytical Studies Branch.
  7. Lavoie, Marie & Roy, Richard & Therrien, Pierre, 2003. "A growing trend toward knowledge work in Canada," Research Policy, Elsevier, vol. 32(5), pages 827-844, May.
  8. Morris M. Kleiner & Marvin L. Bouillon, 1988. "Providing business information to production workers: Correlates of compensation and profitability," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 41(4), pages 605-617, July.
  9. Ichniowski, Casey & Shaw, Kathryn & Prennushi, Giovanna, 1997. "The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines," American Economic Review, American Economic Association, vol. 87(3), pages 291-313, June.
  10. Sabourin, David & Baldwin, John R. & Smith, David, 2003. "Impact of Advanced Technology Use on Firm Performance in the Canadian Food Processing Sector," Economic Analysis (EA) Research Paper Series 2003012e, Statistics Canada, Analytical Studies Branch.
  11. Easton, George S & Jarrell, Sherry L, 1998. "The Effects of Total Quality Management on Corporate Performance: An Empirical Investigation," The Journal of Business, University of Chicago Press, vol. 71(2), pages 253-307, April.
  12. Milgrom, Paul & Roberts, John, 1990. "The Economics of Modern Manufacturing: Technology, Strategy, and Organization," American Economic Review, American Economic Association, vol. 80(3), pages 511-28, June.
  13. Frank R. Lichtenberg, 1993. "The Output Contributions of Computer Equipment and Personnel: A Firm- Level Analysis," NBER Working Papers 4540, National Bureau of Economic Research, Inc.
  14. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 1999. "Information Technology, Workplace Organization and the Demand for Skilled Labor: Firm-Level Evidence," NBER Working Papers 7136, National Bureau of Economic Research, Inc.
  15. 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.
  16. Lisa M Lynch & Sandra E Black, 2002. "How to Compete: The Impact of Workplace Practices and Information Technology on Productivity," Working Papers 02-04, Center for Economic Studies, U.S. Census Bureau.
  17. Surendra Gera & Wulong Gu & Zhengxi Lin, 2001. "Technology and the demand for skills in Canada: an industry-level analysis," Canadian Journal of Economics, Canadian Economics Association, vol. 34(1), pages 132-148, February.
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Citations

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Cited by:
  1. Petr Hanel, 2007. "Productivity and innovation: an overview of the issues," Cahiers de recherche 07-22, Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke.
  2. Evangelista, Rinaldo & Vezzani, Antonio, 2010. "The economic impact of technological and organizational innovations. A firm-level analysis," Research Policy, Elsevier, vol. 39(10), pages 1253-1263, December.
  3. Jean-Francois Arsenault & Andrew Sharpe, 2008. "An Analysis of the Causes of Weak Labour Productivity Growth in Canada since 2000," International Productivity Monitor, Centre for the Study of Living Standards, vol. 16, pages 14-39, Spring.
  4. Sandulli, Francesco D. & Baker, Paul M.A. & López-Sánchez, José I., 2013. "Can small and medium enterprises benefit from skill-biased technological change?," Journal of Business Research, Elsevier, vol. 66(10), pages 1976-1982.
  5. Sadaf Bashir & Uwe Matzat & Bert Sadowski, 2014. "The Adoption of Information and Communication Technologies in the Design Sector and their impact on Firm Performance: Evidence from the Dutch Design Sector," Working Papers 14-01, Eindhoven Center for Innovation Studies, revised Feb 2014.
  6. Someshwar Rao & Andrew Sharpe & Jeremy Smith, 2005. "An Analysis of the Labour Productivity Growth Slowdown in Canada since 2000," International Productivity Monitor, Centre for the Study of Living Standards, vol. 10, pages 3-23, Spring.
  7. Centre for the Study of Living Standards, 2012. "The Impact of Information and Communication Technology on the Productivity of the Canadian Transportation System: A Macroeconomic Approach for the Air and Rail Sectors," CSLS Research Reports 2012-07, Centre for the Study of Living Standards.
  8. Samoilenko, Sergey & Osei-Bryson, Kweku-Muata, 2008. "An exploration of the effects of the interaction between ICT and labor force on economic growth in transition economies," International Journal of Production Economics, Elsevier, vol. 115(2), pages 471-481, October.

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