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B2B or Not to Be: Does B2B E-Commerce Increase Labour Productivity?

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  • Bertschek, Irene
  • Fryges, Helmut
  • Kaiser, Ulrich

Abstract

We implement an endogeneous switching-regression model for labour productivity and firms' decision to use business-to-business (B2B) e-commerce. Our approach allows B2B usage to affect any parameter of the labour productivity equation and to properly take account of strategic complementarities between the input factors and B2B usage. Empirical evidence from 1,394 German firms shows that firms using B2B e-commerce have a significantly higher output elasticity with respect to ICT-investment and produce significantly more efficiently than firms that do not use B2B. Firms' labour productivity is enhanced by using B2B. --

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Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 04-45.

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Date of creation: 2004
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Handle: RePEc:zbw:zewdip:2184

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Keywords: Business-to-business e-commerce; labour productivity; endogenous switching regression model; survey data;

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References

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  1. Radner, Roy, 1993. "The Organization of Decentralized Information Processing," Econometrica, Econometric Society, vol. 61(5), pages 1109-46, September.
  2. Jens Matthias Arnold & Katrin Hussinger, 2004. "Export Behavior and Firm Productivity in German Manufacturing: A firm-level analysis," International Trade 0403007, EconWPA, revised 02 Nov 2004.
  3. Luis Garicano & Steven N. Kaplan, 2001. "The Effects of Business-to-Business E-Commerce on Transaction Costs," NBER Chapters, in: E-commerce, pages 463-485 National Bureau of Economic Research, Inc.
  4. David Lucking-Reiley & Daniel F. Spulber, 2000. "Business-to-Business Electronic Commerce," Vanderbilt University Department of Economics Working Papers 0016, Vanderbilt University Department of Economics.
  5. 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.
  6. Christensen, Clayton M. & Rosenbloom, Richard S., 1995. "Explaining the attacker's advantage: Technological paradigms, organizational dynamics, and the value network," Research Policy, Elsevier, vol. 24(2), pages 233-257, March.
  7. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 2002. "Information Technology, Workplace Organization, And The Demand For Skilled Labor: Firm-Level Evidence," The Quarterly Journal of Economics, MIT Press, vol. 117(1), pages 339-376, February.
  8. Irene Bertschek & Ulrich Kaiser, 2004. "Productivity Effects of Organizational Change: Microeconometric Evidence," Management Science, INFORMS, vol. 50(3), pages 394-404, March.
  9. Milgrom, Paul & Roberts, John, 1990. "The Economics of Modern Manufacturing: Technology, Strategy, and Organization," American Economic Review, American Economic Association, vol. 80(3), pages 511-28, June.
  10. Sanjeev Dewan & Chung-ki Min, 1997. "The Substitution of Information Technology for Other Factors of Production: A Firm Level Analysis," Management Science, INFORMS, vol. 43(12), pages 1660-1675, December.
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Cited by:
  1. Fryges, Helmut, 2004. "Productivity, Growth, and Internationalisation: The Case of German and British High Techs," ZEW Discussion Papers 04-79, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  2. Quirós Romero, Cipriano & Rodríguez Rodríguez, Diego, 2010. "E-commerce and efficiency at the firm level," International Journal of Production Economics, Elsevier, vol. 126(2), pages 299-305, August.
  3. Liu, Ting-Kun & Chen, Jong-Rong & Huang, Cliff C.J. & Yang, Chih-Hai, 2013. "E-commerce, R&D, and productivity: Firm-level evidence from Taiwan," Information Economics and Policy, Elsevier, vol. 25(4), pages 272-283.
  4. Sarbu, Miruna, 2013. "Does social software increase labour productivity?," ZEW Discussion Papers 13-041, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

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