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Information technology, organisational change and productivity growth: evidence from UK firms

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Author Info

  • 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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File URL: http://eprints.lse.ac.uk/19748/
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Bibliographic Info

Paper provided by London School of Economics and Political Science, LSE Library in its series LSE Research Online Documents on Economics with number 19748.

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Length: 35 pages
Date of creation: Mar 2007
Date of revision:
Handle: RePEc:ehl:lserod:19748

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Keywords: information technology; productivity growth; organisational change;

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References

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  1. Mary O'Mahony & Dr Michela Vecchi, 2002. "Do Intangible Investments Affect Companies' Productivity Performance?," NIESR Discussion Papers 141, National Institute of Economic and Social Research.
  2. Edward E. Leamer, 1999. "Effort, Wages, and the International Division of Labor," Journal of Political Economy, University of Chicago Press, vol. 107(6), pages 1127-1162, December.
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  5. Brent Boning & Casey Ichniowski & Kathryn Shaw, 2007. "Opportunity Counts: Teams and the Effectiveness of Production Incentives," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 613-650.
  6. Criscuolo, Chiara & Haskel, Jonathan E. & Slaughter, Matthew J., 2010. "Global engagement and the innovation activities of firms," International Journal of Industrial Organization, Elsevier, vol. 28(2), pages 191-202, March.
  7. 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.
  8. Erik Brynjolfsson & Lorin M. Hitt, 2003. "Computing Productivity: Firm-Level Evidence," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 793-808, November.
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  10. Nickell, Stephen & Nicolitsas, Daphne & Patterson, Malcolm, 2001. " Does Doing Badly Encourage Management Innovation?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 63(1), pages 5-28, February.
  11. Bresnahan, Timothy F, 1999. "Computerisation and Wage Dispersion: An Analytical Reinterpretation," Economic Journal, Royal Economic Society, vol. 109(456), pages F390-415, June.
  12. Susan Athey & Scott Stern, 1998. "An Empirical Framework for Testing Theories About Complimentarity in Organizational Design," NBER Working Papers 6600, National Bureau of Economic Research, Inc.
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  14. Haskel, Jonathan, 1991. "Imperfect Competition, Work Practices and Productivity Growth," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 53(3), pages 265-79, August.
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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. 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.
  3. 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.
  4. Mohnen, Pierre & Mairesse, Jacques, 2010. "Using Innovation Surveys for Econometric Analysis," MERIT Working Papers 023, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  5. repec:cge:warwcg:42 is not listed on IDEAS
  6. 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.
  7. Polder, Michael & Leeuwen, George van & Mohnen, Pierre & Raymond, Wladimir, 2009. "Productivity effects of innovation modes," MPRA Paper 18893, University Library of Munich, Germany.
  8. repec:cge:warwcg:90 is not listed on IDEAS
  9. Michael Polder & George van Leeuwen & Pierre Mohnen & Wladimir Raymond, 2010. "Product, Process and Organizational Innovation: Drivers, Complementarity and Productivity Effects," CIRANO Working Papers 2010s-28, CIRANO.
  10. 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.
  11. Crafts, Nicholas, 2011. "British Relative Economic Decline Revisited," CAGE Online Working Paper Series 42, Competitive Advantage in the Global Economy (CAGE).
  12. repec:cge:warwcg:70 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. Crafts, Nicholas, 2012. "British relative economic decline revisited: The role of competition," Explorations in Economic History, Elsevier, vol. 49(1), pages 17-29.

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