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Big Data Investment, Skills, and Firm Value

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  • Prasanna Tambe

    (Stern School of Business, New York University, New York, New York 10012)

Abstract

This paper analyzes how labor market factors have shaped early returns on big data investment using a new data source---the LinkedIn skills database. The data source enables firm-level measurement of the employment of workers with technical skills such as Hadoop, MapReduce, and Apache Pig. From 2006 to 2011, Hadoop investments were associated with 3% faster productivity growth, but only for firms (a) with significant data assets and (b) in labor markets where similar investments by other firms helped to facilitate the development of a cadre of workers with complementary technical skills. The benefits of labor market concentration decline for investments in mature data technologies, such as Structured Query Language-based databases, for which the complementary skills can be acquired by workers through universities or other channels. These findings underscore the importance of geography, corporate investment, and skill acquisition channels for explaining productivity growth differences during the spread of new information technology innovations. This paper was accepted by Alok Gupta, special issue on business analytics .

Suggested Citation

  • Prasanna Tambe, 2014. "Big Data Investment, Skills, and Firm Value," Management Science, INFORMS, vol. 60(6), pages 1452-1469, June.
    • Handle: RePEc:inm:ormnsc:v:60:y:2014:i:6:p:1452-1469
    DOI: 10.1287/mnsc.2014.1899
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