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Beyond Computation: Information Technology, Organizational Transformation and Business Performance

  • Erik Brynjolfsson
  • Lorin M. Hitt

To understand the economic value of computers, one must broaden the traditional definition of both the technology and its effects. Case studies and firm-level econometric evidence suggest that: 1) organizational "investments" have a large influence on the value of IT investments; and 2) the benefits of IT investment are often intangible and disproportionately difficult to measure. Our analysis suggests that the link between IT and increased productivity emerged well before the recent surge in the aggregate productivity statistics and that the current macroeconomic productivity revival may in part reflect the contributions of intangible capital accumulated in the past.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.14.4.23
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Article provided by American Economic Association in its journal Journal of Economic Perspectives.

Volume (Year): 14 (2000)
Issue (Month): 4 (Fall)
Pages: 23-48

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Handle: RePEc:aea:jecper:v:14:y:2000:i:4:p:23-48
Note: DOI: 10.1257/jep.14.4.23
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  1. Berndt, Ernst R. & Morrison, Catherine J., 1992. "High-tech capital formation and economic performance in U.S. manufacturing industries : an exploratory analysis," Working papers 3419-92., Massachusetts Institute of Technology (MIT), Sloan School of Management.
  2. Greenman, N. & Mairesse, J., 1996. "Computers and Productivity in France: Some Evidence," Monash Econometrics and Business Statistics Working Papers 15/96, Monash University, Department of Econometrics and Business Statistics.
  3. Boskin, Michael J, et al, 1997. "The CPI Commission: Findings and Recommendations," American Economic Review, American Economic Association, vol. 87(2), pages 78-83, May.
  4. Timothy F. Bresnahan & Manuel Trajtenberg, 1992. "General Purpose Technologies "Engines of Growth?"," NBER Working Papers 4148, National Bureau of Economic Research, Inc.
  5. Lehr, William & Lichtenberg, Frank R, 1998. "Computer Use and Productivity Growth in US Federal Government Agencies, 1987-92," Journal of Industrial Economics, Wiley Blackwell, vol. 46(2), pages 257-79, June.
  6. Doms, Mark & Dunne, Timothy & Troske, Kenneth R, 1997. "Workers, Wages, and Technology," The Quarterly Journal of Economics, MIT Press, vol. 112(1), pages 253-90, February.
  7. Robert E. Hall, 1999. "The Stock Market and Capital Accumulation," NBER Working Papers 7180, National Bureau of Economic Research, Inc.
  8. Donald Siegel, 1997. "The Impact Of Computers On Manufacturing Productivity Growth: A Multiple-Indicators, Multiple-Causes Approach," The Review of Economics and Statistics, MIT Press, vol. 79(1), pages 68-78, February.
  9. Maryellen R. Kelley, 1994. "Productivity and Information Technology: The Elusive Connection," Management Science, INFORMS, vol. 40(11), pages 1406-1425, November.
  10. Schankerman, Mark, 1981. "The Effects of Double-Counting and Expensing on the Measured Returns to R&D," The Review of Economics and Statistics, MIT Press, vol. 63(3), pages 454-58, August.
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