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IT Investment and Firm Performance in U.S. Retail Trade

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  • Shawn D Klimek
  • Ron S Jarmin
  • Mark E Doms

Abstract

We examine the relationships between investments in information technology (IT) and two measures of retail firm performance -- productivity and establishment growth -- over the 1992 to 1997 period. We use untapped firm and establishment micro data from the Censuses of Retail Trade and the Assets and Expenditures Survey. We show that large firms account for most retail IT investment, employment and establishment growth. We find evidence of a significant relationship between IT investment intensity and productivity growth. We found no such evidence of a link between IT growth in the number of establishments operated by retail firms.

Suggested Citation

  • Shawn D Klimek & Ron S Jarmin & Mark E Doms, 2002. "IT Investment and Firm Performance in U.S. Retail Trade," Working Papers 02-14, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:02-14
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    References listed on IDEAS

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    1. Stephen D. Oliner & Daniel E. Sichel, 2000. "The Resurgence of Growth in the Late 1990s: Is Information Technology the Story?," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 3-22, Fall.
    2. Lucia Foster & John Haltiwanger & C.J. Krizan, 2002. "The Link Between Aggregate and Micro Productivity Growth: Evidence from Retail Trade," NBER Working Papers 9120, National Bureau of Economic Research, Inc.
    3. Paul Schreyer, 2000. "The Contribution of Information and Communication Technology to Output Growth: A Study of the G7 Countries," OECD Science, Technology and Industry Working Papers 2000/2, OECD Publishing.
    4. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
    5. John R Baldwin & Ron S Jarmin & Jianmin Tang, 2002. "The Trend to Smaller Producers in Manufacturing in Canada and the U.S," Working Papers 02-06, Center for Economic Studies, U.S. Census Bureau.
    6. Mark Doms & Eric J. Bartelsman, 2000. "Understanding Productivity: Lessons from Longitudinal Microdata," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 569-594, September.
    7. Baldwin, John R. Jarmin , Ron S. Tang, Jianmin, 2002. "The Trend to Smaller Producers in Manufacturing: A Canada/U.S. Comparison," Economic Analysis (EA) Research Paper Series 2002003e, Statistics Canada, Analytical Studies Branch.
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    Cited by:

    1. Eric Bartelsman & Andrea Bassanini & John Haltiwanger & Ron Jarmin & Stefano Scarpetta & Thorsten Schank, 2002. "The Spread of ICT and Productivity Growth: Is Europe Really Lagging Behind in the New Economy?," CEPN Working Papers halshs-00289168, HAL.
    2. C.J. Krizan & John Haltiwanger & Lucia Foster, 2002. "The Link Between Aggregate and Micro Productivity Growth: Evidence from Retail Trade," Working Papers 02-18, Center for Economic Studies, U.S. Census Bureau.
    3. Mark Doms, 2004. "Productivity growth and the retail sector," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue dec17.
    4. Sampath Rajagopalan, 2013. "Impact of Variety and Distribution System Characteristics on Inventory Levels at U.S. Retailers," Manufacturing & Service Operations Management, INFORMS, vol. 15(2), pages 191-204, May.
    5. Garnadt, Niklas, 2017. "The increasing presence of large firms and its consequences for US startup rates," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168091, Verein für Socialpolitik / German Economic Association.
    6. John Haltiwanger & Ron Jarmin & Thorsten Schank, 2003. "Productivity, Investment in ICT and Market Experimentation: Micro Evidence from Germany and the U.S," Working Papers 03-06, Center for Economic Studies, U.S. Census Bureau.
    7. Randy A. Becker & John Haltiwanger & Ron S. Jarmin & Shawn D. Klimek & Daniel J. Wilson, 2006. "Micro and Macro Data Integration: The Case of Capital," NBER Chapters, in: A New Architecture for the US National Accounts, pages 541-610, National Bureau of Economic Research, Inc.
    8. Richard Dion & Robert Fay, 2008. "Understanding Productivity: A Review of Recent Technical Research," Discussion Papers 08-3, Bank of Canada.
    9. Emek Basker & Pham Hoang Van, 2005. "Putting a Smiley Face on the Dragon: Wal-Mart as Catalyst to U.S.-China Trade," Working Papers 0506, Department of Economics, University of Missouri, revised 07 Oct 2005.

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    Keywords

    CES; economic; research; micro; data; microdata; chief; economist;
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