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Information Technology, Organisational Change and Productivity Growth: Evidence from UK Firms

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  • Gustavo Crespi
  • Chiara Criscuolo
  • Jonathan Haskel

Abstract

We examine the relationships between productivity growth, IT investment and organisational change (∆O) using UK firm data. Consistent with the small number of other micro studies we find (a) IT appears to have high returns in a growth accounting sense when ∆O is omitted; when ∆O is included the IT returns are greatly reduced, (b) IT and ∆O interact in their effect on productivity growth, (c) non-IT investment and ∆O do not interact in their effect on productivity growth. Some new findings are (a) ∆O is affected by competition; (b) US-owned firms are much more likely to introduce ∆O relative to foreign owned firms who are more likely still relative to UK firms; (c) our predicted measured TFP growth slowdown for firms who are not doing ∆O and/or are in the early stages of IT investment compare well with the macro numbers documenting a UK measured TFP growth slowdown.

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Bibliographic Info

Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0783.

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Date of creation: Mar 2007
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Handle: RePEc:cep:cepdps:dp0783

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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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Keywords: information technology; productivity growth; organisational change;

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References

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Cited by:
  1. Polder, Michael & Leeuwen, George van & Mohnen, Pierre & Raymond, Wladimir, 2010. "Product, process and organizational innovation: drivers, complementarity and productivity effects," MERIT Working Papers 035, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  2. O'Mahony, Mary & Peng, Fei, 2009. "Skill bias, age and organizational change," MPRA Paper 38767, University Library of Munich, Germany.
  3. Cassiman, Bruno & Golovko, Elena & Martínez-Ros, Ester, 2010. "Innovation, exports and productivity," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 28(4), pages 372-376, July.
  4. Crafts, Nicholas, 2012. "British relative economic decline revisited: The role of competition," Explorations in Economic History, Elsevier, Elsevier, vol. 49(1), pages 17-29.
  5. Pierre Mohnen & Bronwyn H. Hall, 2013. "Innovation and Productivity: An Update," Eurasian Business Review, Eurasia Business and Economics Society, Eurasia Business and Economics Society, vol. 3(1), pages 47-65, Spring.
  6. Benjamin David, 2012. "Modélisation non-linéaire de l'impact des TIC sur la productivité du travail," EconomiX Working Papers 2012-51, University of Paris West - Nanterre la Défense, EconomiX.
  7. Spyros Arvanitis & Euripidis N. Loukis & Vasiliki Diamantopoulou, 2013. "Are ICT, Workplace Organization and Human Capital Relevant for Innovation? A Comparative Study Based on Swiss and Greek Micro Data," KOF Working papers, KOF Swiss Economic Institute, ETH Zurich 13-333, KOF Swiss Economic Institute, ETH Zurich.
  8. Jacques Mairesse & Pierre Mohnen, 2010. "Using Innovations Surveys for Econometric Analysis," NBER Working Papers 15857, National Bureau of Economic Research, Inc.
  9. Polder, Michael & Leeuwen, George van & Mohnen, Pierre & Raymond, Wladimir, 2009. "Productivity effects of innovation modes," MPRA Paper 18893, University Library of Munich, Germany.
  10. Crafts, Nicholas, 2011. "British Relative Economic Decline Revisited," CEPR Discussion Papers, C.E.P.R. Discussion Papers 8384, C.E.P.R. Discussion Papers.
  11. López, Alberto, 2012. "Productivity effects of ICTs and organizational change: A test of the complementarity hypothesis in Spain," MPRA Paper 40400, University Library of Munich, Germany.
  12. Arvanitis, Spyros & Loukis, Euripidis N., 2009. "Information and communication technologies, human capital, workplace organization and labour productivity: A comparative study based on firm-level data for Greece and Switzerland," Information Economics and Policy, Elsevier, Elsevier, vol. 21(1), pages 43-61, February.

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