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Human capital is the key to the IT productivity paradox

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Author Info

  • Gunnarsson, Gudmundur

    ()
    (Mälardalen University, Dept of Business Adminstration and Information Systems)

  • Mellander, Erik

    ()
    (IFAU - Insitute for Labour Market Policy Evaluation)

  • Savvidou, Eleni

    ()
    (Uppsala University, Dept of Economics)

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    Abstract

    Unlike previous analysis, we consider (i) possible externalities in the use of IT and (ii) IT and human capital interactions. Examining, hypothetically, the statistical consequences of erroneously disregarding (i) and (ii) we shed light on the small or negative growth effects found in early studies of the effects of IT on productivity growth, as well as the positive impacts reported more recently. Our empirical analysis uses a 14-industry panel for Swedish manufacturing 1986–95. We find that human capital developments made the average effect of IT essentially zero in 1986 and steadily increasing thereafter, and, also, generated large differences in growth effects across industries.

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    Bibliographic Info

    Paper provided by IFAU - Institute for Evaluation of Labour Market and Education Policy in its series Working Paper Series with number 2004:13.

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    Length: 60 pages
    Date of creation: 04 Oct 2004
    Date of revision:
    Handle: RePEc:hhs:ifauwp:2004_013

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    Postal: IFAU, P O Box 513, SE-751 20 Uppsala, Sweden
    Phone: (+46) 18 - 471 70 70
    Fax: (+46) 18 - 471 70 71
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    Related research

    Keywords: IT productivity paradox; applied econometrics;

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    References

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    Cited by:
    1. Martin Sˆderstrˆm & Roope Uusitalo, 2010. "School Choice and Segregation: Evidence from an Admission Reform," Scandinavian Journal of Economics, Wiley Blackwell, vol. 112(1), pages 55-76, 03.
    2. Gomes, Orlando, 2006. "Too much of a good thing: endogenous business cycles generated by bounded technological progress," MPRA Paper 2845, University Library of Munich, Germany.
    3. Gunnar Eliasson, 2011. "Advanced purchasing, spillovers and innovative discovery," Journal of Evolutionary Economics, Springer, vol. 21(1), pages 121-139, February.

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