The Effect of Adjustment Costs and Organizational Change on Productivity in Canada: Evidence from Aggregate Data
AbstractDanny Leung of the Bank of Canada provides support for the hypothesis that organizational change is a necessary condition for the full realization of the productivity gains associated with ICT. Using aggegate data, the author finds econometric evidence that the impact of computer investment is not fully realized until three years after the initial investment. Firms appear to need a learning period during which they make the necessary adjustments to their organizational structures in order to benefit from the productivity-augmenting potential of ICT. One implication of this analysis is that despite the current lull in investment, productivity growth in Canada should continue to remain fairly robust as firms continue to integrate new technologies into their production processes.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Centre for the Study of Living Standards in its journal International Productivity Monitor.
Volume (Year): 9 (2004)
Issue (Month): (Fall)
Other versions of this item:
- Danny Leung, 2004. "The Effect of Adjustment Costs and Organizational Change on Productivity in Canada: Evidence from Aggregate Data," Working Papers 04-1, Bank of Canada.
- O51 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
- M11 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Production Management
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Oliner, Stephen D. & Sichel, Daniel E., 2003.
"Information technology and productivity: where are we now and where are we going?,"
Journal of Policy Modeling,
Elsevier, vol. 25(5), pages 477-503, July.
- Stephen D. Oliner & Daniel E. Sichel, 2002. "Information technology and productivity: where are we now and where are we going?," Economic Review, Federal Reserve Bank of Atlanta, issue Q3, pages 15-44.
- Stephen D. Oliner & Daniel E. Sichel, 2002. "Information technology and productivity: where are we now and where are we going?," Finance and Economics Discussion Series 2002-29, Board of Governors of the Federal Reserve System (U.S.).
- Shapiro, Matthew D, 1986.
"Capital Utilization and Capital Accumulation: Theory and Evidence,"
Journal of Applied Econometrics,
John Wiley & Sons, Ltd., vol. 1(3), pages 211-34, July.
- Matthew D. Shapiro, 1985. "Capital Utilization and Capital Accumulation: Theory and Evidence," Cowles Foundation Discussion Papers 736, Cowles Foundation for Research in Economics, Yale University.
- Matthew D. Shapiro, 1987. "Capital Utilization and Capital Accumulation: Theory and Evidence," NBER Working Papers 1900, National Bureau of Economic Research, Inc.
- Edward N. Wolff, 2002.
"Productivity, computerization, and skill change,"
Federal Reserve Bank of Atlanta, issue Q3, pages 63-87.
- Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 2002.
"Information Technology, Workplace Organization, And The Demand For Skilled Labor: Firm-Level Evidence,"
The Quarterly Journal of Economics,
MIT Press, vol. 117(1), pages 339-376, February.
- 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.
- Susanto Basu & John G. Fernald & Nicholas Oulton & Sylaja Srinivasan, 2003.
"The Case of the Missing Productivity Growth: Or, Does Information technology explain why productivity accelerated in the United States but not the United Kingdom?,"
Harvard Institute of Economic Research Working Papers
2021, Harvard - Institute of Economic Research.
- Susanto Basu & John G. Fernald & Nicholas Oulton & Sylaja Srinivasan, 2003. "The case of the missing productivity growth: or, does information technology explain why productivity accelerated in the United States but not the United Kingdom?," Working Paper Series WP-03-08, Federal Reserve Bank of Chicago.
- Brynjolfsson, Erik & Hitt, Lorin M., 2004.
"Computing Productivity: Firm-Level Evidence,"
4210-01, Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Hashmat Khan & Marjorie Santos, 2002. "Contribution of ICT Use to Output and Labour-Productivity Growth in Canada," Working Papers 02-7, Bank of Canada.
- James Bessen, 2002. "Technology Adoption Costs and Productivity Growth: The Transition to Information Technology," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(2), pages 443-469, April.
- Lichtenberg, Frank R, 1988. "Estimation of the Internal Adjustment Costs Model Using Longitudinal Establishment Data," The Review of Economics and Statistics, MIT Press, vol. 70(3), pages 421-30, August.
- Robert E. Lucas & Jr., 1967. "Adjustment Costs and the Theory of Supply," Journal of Political Economy, University of Chicago Press, vol. 75, pages 321.
- Stiroh, Kevin J, 2002. "Are ICT Spillovers Driving the New Economy?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(1), pages 33-57, March.
- Michael T. Kiley, 1999. "Computers and growth with costs of adjustment: will the future look like the past?," Finance and Economics Discussion Series 1999-36, Board of Governors of the Federal Reserve System (U.S.).
- 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.
- Alain Paquet & Benoit Robidoux, 1997. "Issues on the Measurement of the Solow Residual and the Testing of its Exogeneity: a Tale of Two Countries," Cahiers de recherche CREFE / CREFE Working Papers 51, CREFE, Université du Québec à Montréal.
- Baldwin, John R. Harchaoui, Tarek, 2002. "Productivity Growth in Canada," Productivity Growth in Canada, Statistics Canada, Economic Analysis Division, number stcb6e, May.
- 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.
- Richard Dion & Robert Fay, 2008. "Understanding Productivity: A Review of Recent Technical Research," Discussion Papers 08-3, Bank of Canada.
- Dirk Pilat, 2005. "Canada's Productivity Performance in International Perspective," International Productivity Monitor, Centre for the Study of Living Standards, vol. 10, pages 24-44, Spring.
- M. Ayhan Kose & Roberto Cardarelli, 2004. "Economic Integration, Business Cycle, and Productivity in North America," IMF Working Papers 04/138, International Monetary Fund.
- 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.
- 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.
- Danny Leung & Yi Zheng, 2008.
"What Affects MFP in the Long-Run? Evidence from Canadian Industries,"
08-4, Bank of Canada.
- Danny Leung & Yi Zheng, 2012. "What affects MFP in the long-run? Evidence from Canadian industries," Applied Economics, Taylor and Francis Journals, vol. 44(6), pages 727-738, February.
- Jason Allen & Walter Engert & Ying Liu, 2006. "Are Canadian Banks Efficient? A Canada--U.S. Comparison," Working Papers 06-33, Bank of Canada.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Whitney Hamilton) The email address of this maintainer does not seem to be valid anymore. Please ask Whitney Hamilton to update the entry or send us the correct address.
If references are entirely missing, you can add them using this form.