The Contributions of IT-related Production Factors in Japanese Companies: The Estimation of Excess Returns(in Japanese)

Motivation A purpose of this report is to analyze contributions of Information Technology (IT) in Japanese companies using firm-level data. Many precedent studies have been done in the U.S., and they made an agreement that there exist the output contributions of IT. On the other hand, some studies about Japanese companies come to be done, however, they do not reach an enough agreement. 2. Approach The research reported here is based on large-scale cross-section data, gathered in the Actual Condition Survey of Information Processing 2004, Ministry of Economy, Trade and Industry. We estimate the Cobb-Douglas production function including IT capital, other capital, IT-related labor, labor as production factors. And we check whether IT-related production factors generate excess returns to non IT-related production factors. Furthermore, we estimate firms' total factor productivity (TFP) and regress TFP on IT-related production factors for robustness. 3. Results At first, the contributions for production of IT capital or IT-related labor are positive. These results are different from a precedent study in Japan and agree with the U.S. studies' results basically. However, IT capital or IT work force generates zero or negative excess return, so high positive excess returns reported in the U.S. studies are not observed. This suggests that Japanese information investment and human capital investment do not function so effectively. In addition, a correlation of TFP and IT-related production factors is extremely feeble, too. 4. Conclusion Unlike the results in the U.S. studies, the contribution of IT capital or IT work force are relatively low in Japanese companies. For one possibility, the active information investment reached over-investment level. However, for another realistic possibility, it may say that skill improvements of IT-related labor or firm organization structures, which are complementary factors to IT, are insufficient so that IT production factors cannot exertive.