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B2B or Not to Be: Does B2B E-Commerce Increase Labour Productivity?

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Author Info
Irene Bertschek
Helmut Fryges
Ulrich Kaiser

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Abstract

We implement an endogeneous switching-regression model for labour productivity and firms’ decisions to use business-to-business (B2B) e-commerce. Our approach allows B2B usage to affect any parameter of the labour productivity equation and to properly take account of strategic complementarities between the input factors and B2B usage. Empirical evidence from 1,460 German firms shows that there is a simultaneous relationship between labour productivity and the adoption of B2B. Firms deciding to use B2B e-commerce employ their input factors more efficiently than non-B2B users. Conversely, firms refrain from engaging in B2B probably because they expect the cost of B2B adoption will not be sufficiently compensated by productivity gains.

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Publisher Info
Article provided by Taylor and Francis Journals in its journal International Journal of the Economics of Business.

Volume (Year): 13 (2006)
Issue (Month): 3 (November)
Pages: 387-405
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Handle: RePEc:taf:ijecbs:v:13:y:2006:i:3:p:387-405

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Related research
Keywords: Business-to-Business E-Commerce; Labour Productivity; Endogenous Switching Regression Model; Survey Data;

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References listed on IDEAS
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.:
  1. 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. [Downloadable!] (restricted)
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  2. 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. [Downloadable!] (restricted)
  3. 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. [Downloadable!] (restricted)
  4. David Lucking-Reiley & Daniel F. Spulber, 2000. "Business-to-Business Electronic Commerce," Working Papers 0016, Department of Economics, Vanderbilt University. [Downloadable!]
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  5. Garicano, Luis & Kaplan, Steven N, 2001. "The Effects of Business-to-Business E-Commerce on Transaction Costs," Journal of Industrial Economics, Blackwell Publishing, vol. 49(4), pages 463-85, December. [Downloadable!] (restricted)
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  6. Bertschek, Irene & Kaiser, Ulrich, 2001. "Productivity effects of organizational change : microeconometric evidence," ZEW Discussion Papers 01-32, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  7. Arnold, Jens Matthias & Hussinger, Katrin, 2004. "Export Behavior and Firm Productivity in German Manufacturing : A Firm-level Analysis," ZEW Discussion Papers 04-12, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
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  8. Radner, Roy, 1993. "The Organization of Decentralized Information Processing," Econometrica, Econometric Society, vol. 61(5), pages 1109-46, September. [Downloadable!] (restricted)
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Cited by:
(explanations, 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.)

  1. Fryges, Helmut, 2004. "Productivity, Growth, and Internationalisation : The Case of German and British High Techs," ZEW Discussion Papers 04-79, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
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