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Information Technology, Organisational Change and Productivity Growth: Evidence from UK Firms

  • Gustavo Crespi
  • Chiara Criscuolo
  • Jonathan Haskel

We examine the relationships between productivity growth, IT investment and organisational change (∆O) using UK firm data. Consistent with the small number of other micro studies we find (a) IT appears to have high returns in a growth accounting sense when ∆O is omitted; when ∆O is included the IT returns are greatly reduced, (b) IT and ∆O interact in their effect on productivity growth, (c) non-IT investment and ∆O do not interact in their effect on productivity growth. Some new findings are (a) ∆O is affected by competition; (b) US-owned firms are much more likely to introduce ∆O relative to foreign owned firms who are more likely still relative to UK firms; (c) our predicted measured TFP growth slowdown for firms who are not doing ∆O and/or are in the early stages of IT investment compare well with the macro numbers documenting a UK measured TFP growth slowdown.

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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0783.

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Date of creation: Mar 2007
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Handle: RePEc:cep:cepdps:dp0783
Contact details of provider: Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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