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It and Productivity in U.S. Manufacturing: Do Computer Networks Matter?

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  • B. K. Atrostic
  • Sang V. Nguyen

Abstract

The link between information technology and productivity is clear. Yet how computers affect productivity is not well understood. Ours is the first study using data for approximately 30,000 U.S. manufacturing plants to examine the effect of computer networks on productivity. We find a positive and significant relationship between computer networks and plant labor productivity. Plants with lower productivity in earlier periods are also more likely to have a computer network, supporting the hypothesis that plants use networks to catch up. The positive network effect remains significant when we account for endogenous computer networks. (JEL L6, O3) Copyright 2005, Oxford University Press.

Suggested Citation

  • B. K. Atrostic & Sang V. Nguyen, 2005. "It and Productivity in U.S. Manufacturing: Do Computer Networks Matter?," Economic Inquiry, Western Economic Association International, vol. 43(3), pages 493-506, July.
    • Handle: RePEc:oup:ecinqu:v:43:y:2005:i:3:p:493-506
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    Citations

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    Cited by:

    1. Mirko Draca & Raffaella Sadun & John Van Reenen, 2006. "Productivity and ICT: A Review of the Evidence," CEP Discussion Papers dp0749, Centre for Economic Performance, LSE.
    2. Arthur Grimes & Cleo Ren & Philip Stevens, 2012. "The need for speed: impacts of internet connectivity on firm productivity," Journal of Productivity Analysis, Springer, vol. 37(2), pages 187-201, April.
    3. Derya Fındık & Aysıt Tansel, 2013. "Intangible investment and Technical efficiency: The case of software-intensive manufacturing firms in Turkey," EY International Congress on Economics I (EYC2013), October 24-25, 2013, Ankara, Turkey 235, Ekonomik Yaklasim Association.
    4. Nicola Matteucci & Mary O'Mahony & Catherine Robinson & Thomas Zwick, 2005. "Productivity, Workplace Performance And Ict: Industry And Firm‐Level Evidence For Europe And The Us," Scottish Journal of Political Economy, Scottish Economic Society, vol. 52(3), pages 359-386, July.
    5. Polák, Petr, 2017. "The productivity paradox: A meta-analysis," Information Economics and Policy, Elsevier, vol. 38(C), pages 38-54.
    6. Marina Dubinina, 2017. "Impact of Information Technology on the Dynamics of Employment in Russia and Abroad," Science Governance and Scientometrics Journal, Russian Research Institute of Economics, Politics and Law in Science and Technology (RIEPL), vol. 12(2), pages 109-133, June.
    7. Javier Jorge-Vázquez & Mª Peana Chivite-Cebolla & Francisco Salinas-Ramos, 2021. "The Digitalization of the European Agri-Food Cooperative Sector. Determining Factors to Embrace Information and Communication Technologies," Agriculture, MDPI, vol. 11(6), pages 1-16, June.
    8. Nikolas Zolas & Zachary Kroff & Erik Brynjolfsson & Kristina McElheran & David N. Beede & Cathy Buffington & Nathan Goldschlag & Lucia Foster & Emin Dinlersoz, 2020. "Advanced Technologies Adoption and Use by U.S. Firms: Evidence from the Annual Business Survey," NBER Working Papers 28290, National Bureau of Economic Research, Inc.
    9. Kristina McElheran, 2015. "Do Market Leaders Lead in Business Process Innovation? The Case(s) of E-business Adoption," Management Science, INFORMS, vol. 61(6), pages 1197-1216, June.
    10. Francesco Venturini & Ana Rincon-Aznar & Dr Michela Vecchi, 2013. "ICT as a general purpose technology: spillovers, absorptive capacity and productivity performance," National Institute of Economic and Social Research (NIESR) Discussion Papers 416, National Institute of Economic and Social Research.
    11. Jian Zhu & Zifang Li & Hui Wang, 2023. "Internet Development and Urban–Rural Consumption Inequality: Evidence from Chinese Cities," Sustainability, MDPI, vol. 15(12), pages 1-15, June.
    12. Sang Nguyen & B.K. Atrostic, 2006. "How Businesses Use Information Technology: Insights for Measuring Technology and Productivity," Working Papers 06-15, Center for Economic Studies, U.S. Census Bureau.
    13. Wen, Huwei & Zhong, Qiming & Lee, Chien-Chiang, 2022. "Digitalization, competition strategy and corporate innovation: Evidence from Chinese manufacturing listed companies," International Review of Financial Analysis, Elsevier, vol. 82(C).
    14. Wang, Jun & Hu, Yong & Zhang, Zhiming, 2021. "Skill-biased technological change and labor market polarization in China," Economic Modelling, Elsevier, vol. 100(C).
    15. B. Atrostic, 2008. "Measuring U.S. innovative activity: business data at the U.S. Census Bureau," The Journal of Technology Transfer, Springer, vol. 33(2), pages 153-171, April.
    16. Chia-Lin Chang & Michael McAleer & Yu-Chieh Wu, 2018. "A Statistical Analysis of Industrial Penetration and Internet Intensity in Taiwan," Future Internet, MDPI, vol. 10(3), pages 1-26, March.
    17. Díaz-Chao, Ángel & Sainz-González, Jorge & Torrent-Sellens, Joan, 2015. "ICT, innovation, and firm productivity: New evidence from small local firms," Journal of Business Research, Elsevier, vol. 68(7), pages 1439-1444.
    18. Derya Findik & Aysit Tansel, 2015. "​ Intangible Investment and Technical Efficiency: The Case of Software-Intensive Manufacturing Firms in Turkey," Working Papers 2015/11, Turkish Economic Association.
    19. 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.
    20. Won-Sik Hwang & Ho-Sung Kim, 2022. "Does the adoption of emerging technologies improve technical efficiency? Evidence from Korean manufacturing SMEs," Small Business Economics, Springer, vol. 59(2), pages 627-643, August.
    21. Francesco Venturini & Ana Rincon-Aznar & Dr Michela Vecchi, 2013. "ICT as a general purpose technology: spillovers, absorptive capacity and productivity performance," National Institute of Economic and Social Research (NIESR) Discussion Papers 416, National Institute of Economic and Social Research.
    22. Yuanbin Xu & Haiqing Yu & Xin Zeng & Xinmin Zhang, 2023. "Impacts of environmental regulation on innovation in the context of the Internet," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(11), pages 13281-13303, November.
    23. Greenstein, Shane, 2010. "Innovative Conduct in Computing and Internet Markets," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 477-537, Elsevier.
    24. B.K. Atrostic & Kazuyuki Motohashi & Sang Nguyen, 2008. "Computer Network Use and Firms' Productivity Performance: The United States vs. Japan," Working Papers 08-30, Center for Economic Studies, U.S. Census Bureau.
    25. Ana Rincon & Michela VECCHI & Francesco VENTURINI, 2012. "ICT spillovers, absorptive capacity and productivity performance," Quaderni del Dipartimento di Economia, Finanza e Statistica 103/2012, Università di Perugia, Dipartimento Economia.

    More about this item

    JEL classification:

    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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