IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

The Contributions of IT-related Production Factors in Japanese Companies: The Estimation of Excess Returns(in Japanese)

Listed author(s):
  • KUROKAWA Futoshi
Registered author(s):

    Motivation A purpose of this report is to analyze contributions of Information Technology (IT) in Japanese companies using firm-level data. Many precedent studies have been done in the U.S., and they made an agreement that there exist the output contributions of IT. On the other hand, some studies about Japanese companies come to be done, however, they do not reach an enough agreement. 2. Approach The research reported here is based on large-scale cross-section data, gathered in the Actual Condition Survey of Information Processing 2004, Ministry of Economy, Trade and Industry. We estimate the Cobb-Douglas production function including IT capital, other capital, IT-related labor, labor as production factors. And we check whether IT-related production factors generate excess returns to non IT-related production factors. Furthermore, we estimate firms' total factor productivity (TFP) and regress TFP on IT-related production factors for robustness. 3. Results At first, the contributions for production of IT capital or IT-related labor are positive. These results are different from a precedent study in Japan and agree with the U.S. studies' results basically. However, IT capital or IT work force generates zero or negative excess return, so high positive excess returns reported in the U.S. studies are not observed. This suggests that Japanese information investment and human capital investment do not function so effectively. In addition, a correlation of TFP and IT-related production factors is extremely feeble, too. 4. Conclusion Unlike the results in the U.S. studies, the contribution of IT capital or IT work force are relatively low in Japanese companies. For one possibility, the active information investment reached over-investment level. However, for another realistic possibility, it may say that skill improvements of IT-related labor or firm organization structures, which are complementary factors to IT, are insufficient so that IT production factors cannot exertive.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Paper provided by Economic and Social Research Institute (ESRI) in its series ESRI Discussion paper series with number 166.

    in new window

    Length: 35 pages
    Date of creation: Jun 2006
    Handle: RePEc:esj:esridp:166
    Contact details of provider: Postal:
    1-6-1 Nagata-cho, Chiyoda-ku, Tokyo 100-8914

    Web page:

    More information through EDIRC

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    in new window

    1. Ernst R. Berndt & Catherine J. Morrison & Larry S. Rosenblum, 1992. "High-Tech Capital Formation and Labor Composition in U.S. Manufacturing Industries: An Exploratory Analysis," NBER Working Papers 4010, National Bureau of Economic Research, Inc.
    2. Erik Brynjolfsson & Lorin Hitt, 1996. "Paradox Lost? Firm-Level Evidence on the Returns to Information Systems Spending," Management Science, INFORMS, vol. 42(4), pages 541-558, April.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:esj:esridp:166. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (KAWAMOTO Takuma)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.