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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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  1. Nickell, Stephen & Wadhwani, Sushil & Wall, Martin, 1992. "Productivity growth in U.K. companies, 1975-1986," European Economic Review, Elsevier, vol. 36(5), pages 1055-1085, June.
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Citations

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Cited by:
  1. 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 13-333, KOF Swiss Economic Institute, ETH Zurich.
  2. Polder, Michael & Van Leeuwen, George & Mohnen, Pierre & Raymond, Wladimir, 2010. "Product, process and organizational innovation: drivers, complementarity, and productivity effects," MPRA Paper 23719, University Library of Munich, Germany.
  3. Crafts, Nicholas, 2012. "British relative economic decline revisited: The role of competition," Explorations in Economic History, Elsevier, vol. 49(1), pages 17-29.
  4. Crafts, Nicholas, 2011. "British Relative Economic Decline Revisited," CAGE Online Working Paper Series 42, Competitive Advantage in the Global Economy (CAGE).
  5. repec:cge:warwcg:70 is not listed on IDEAS
  6. Cassiman, Bruno & Golovko, Elena & Martínez-Ros, Ester, 2010. "Innovation, exports and productivity," International Journal of Industrial Organization, Elsevier, vol. 28(4), pages 372-376, July.
  7. repec:cge:warwcg:42 is not listed on IDEAS
  8. 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.
  9. Jacques Mairesse & Pierre Mohnen, 2010. "Using Innovation Surveys for Econometric Analysis," CIRANO Working Papers 2010s-15, CIRANO.
  10. 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, vol. 21(1), pages 43-61, February.
  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. repec:cge:warwcg:90 is not listed on IDEAS
  13. O'Mahony, Mary & Peng, Fei, 2009. "Skill bias, age and organizational change," MPRA Paper 38767, University Library of Munich, Germany.
  14. Polder, Michael & Leeuwen, George van & Mohnen, Pierre & Raymond, Wladimir, 2009. "Productivity effects of innovation modes," MPRA Paper 18893, University Library of Munich, Germany.

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