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Is Human Capital the Key to the IT Productivity Paradox?

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Author Info
Mellander, Erik () (The Research Institute of Industrial Economics)
Savvidiou, Eleni () (Uppsala University)
Gunnarsson, Gudmundur () (Mälardalen's University College)
Abstract

Unlike previous analyses, we consider (i) that IT may affect productivity growth both directly and indirectly, through human capital interactions, and (ii) possible externalities in the use of IT. Examining, hypothetically, the statistical consequences of erroneously disregarding (i) and (ii) we shed light on the small or negative growth effects found in early U.S. studies, as well as the positive impacts reported 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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Publisher Info
Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 551.

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Length: 48 pages
Date of creation: 27 Feb 2001
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Handle: RePEc:hhs:iuiwop:0551

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Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
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Related research
Keywords: IT-human Capital Complementarity; New Growth Theory; Applied Econometrics;

Other versions of this item:

Find related papers by JEL classification:
D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Håkanson, Christina & Johanson, Satu & Mellander, Erik, 2003. "Employer-Sponsored Training in Stabilisation and Growth Policy Perspectives," Working Paper Series 592, Research Institute of Industrial Economics. [Downloadable!]
  2. Savvidou, Eleni, 2003. "The Relationship Between Skilled Labor and Technical Change," Working Paper Series 2003:27, Uppsala University, Department of Economics. [Downloadable!]
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