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Human capital is the key to the IT productivity paradox

  • Gunnarsson, Gudmundur

    ()

    (Mälardalen University, Dept of Business Adminstration and Information Systems)

  • Mellander, Erik

    ()

    (IFAU - Insitute for Labour Market Policy Evaluation)

  • Savvidou, Eleni

    ()

    (Uppsala University, Dept of Economics)

Registered author(s):

    Unlike previous analysis, we consider (i) possible externalities in the use of IT and (ii) IT and human capital interactions. Examining, hypothetically, the statistical consequences of erroneously disregarding (i) and (ii) we shed light on the small or negative growth effects found in early studies of the effects of IT on productivity growth, as well as the positive impacts reported more recently. Our empirical analysis uses a 14-industry panel for Swedish manufacturing 1986–95. We find that human capital developments made the average effect of IT essentially zero in 1986 and steadily increasing thereafter, and, also, generated large differences in growth effects across industries.

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    Paper provided by IFAU - Institute for Evaluation of Labour Market and Education Policy in its series Working Paper Series with number 2004:13.

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    Length: 60 pages
    Date of creation: 04 Oct 2004
    Date of revision:
    Handle: RePEc:hhs:ifauwp:2004_013
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