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Revisiting the productivity paradox: A semiparametric smooth coefficient approach based on evidence from Taiwan

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  • Liu, Ting-Kun
  • Chen, Jong-Rong
  • Huang, Cliff J.
  • Yang, Chih-Hai

Abstract

This paper explores the issue of whether investment in information technology (IT) will bring about the Solow productivity paradox. The semiparametric smooth coefficient approach is applied to implement estimations considering how the non-neutral impact of IT might affect labor productivity and thus contribute to productivity. The empirical results are obtained employing firm-level manufacturing data from Taiwan to show that IT investment has as a significantly positive influence on productivity. Specifically, IT exhibits a significant spillover impact on promoting labor productivity in general, particularly for larger and more IT deepened firms.

Suggested Citation

  • Liu, Ting-Kun & Chen, Jong-Rong & Huang, Cliff J. & Yang, Chih-Hai, 2014. "Revisiting the productivity paradox: A semiparametric smooth coefficient approach based on evidence from Taiwan," Technological Forecasting and Social Change, Elsevier, vol. 81(C), pages 300-308.
    • Handle: RePEc:eee:tefoso:v:81:y:2014:i:c:p:300-308
    DOI: 10.1016/j.techfore.2013.04.007
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    Cited by:

    1. Sun, Zhe & Zhao, Liang & Kaur, Puneet & Islam, Nazrul & Dhir, Amandeep, 2023. "Theorizing the relationship between the digital economy and firm productivity: The idiosyncrasies of firm-specific contexts," Technological Forecasting and Social Change, Elsevier, vol. 189(C).
    2. Stefan Schweikl & Robert Obermaier, 2020. "Lessons from three decades of IT productivity research: towards a better understanding of IT-induced productivity effects," Management Review Quarterly, Springer, vol. 70(4), pages 461-507, November.
    3. Cliff J. Huang & Tsu-Tan Fu & Hung-Pin Lai & Yung-Lieh Yang, 2017. "Semiparametric smooth coefficient quantile estimation of the production profile," Empirical Economics, Springer, vol. 52(1), pages 373-392, February.
    4. Raluca Ioana IORGULESCU & John M. POLIMENI, 2016. "A Cautionary Tale For Digital Age Transitioning: The Impeding Polarization Effects," Romanian Economic Business Review, Romanian-American University, vol. 11(2), pages 145-153, June.

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    More about this item

    Keywords

    Information technology; Semi-parametric smooth coefficient model; Spillover;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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