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Computer Networks and Productivity Revisited: Does Plant Size Matter? Evidence and Implications

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  • Henry Hyatt
  • Sang Nguyen

Abstract

Numerous studies have documented a positive association between information technology (IT) investments and business- and establishment-level productivity, but these studies usually pay sole or disporportionate attention to small- or medium-sized entities. In this paper, we revisit the evidence for manufacturing plants presented in Atrostic and Nguyen (2005) and show that the positive relationship between computer networks and labor productivity is only found among small- and medium-sized plants. Indeed, for larger plants the relationship is negative, and employment-weighted estimates indicate computer networks have a negative relationship with the productivity of employees, on average. These findings indicate that computer network investments may have an ambiguous relationship with aggregate labor productivity growth.

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File URL: ftp://ftp2.census.gov/ces/wp/2010/CES-WP-10-25.pdf
File Function: First version, 2010
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Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 10-25.

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Length: 24 pages
Date of creation: Sep 2010
Date of revision:
Handle: RePEc:cen:wpaper:10-25

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  1. Timothy Dunne & Lucia Foster & John Haltiwanger & Kenneth R. Troske, 2004. "Wage and Productivity Dispersion in United States Manufacturing: The Role of Computer Investment," Journal of Labor Economics, University of Chicago Press, vol. 22(2), pages 397-430, April.
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