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Is Human Capital the Key to the IT Productivity Paradox?

  • Mellander, Erik

    ()

    (The Research Institute of Industrial Economics)

  • Savvidiou, Eleni

    ()

    (Uppsala University)

  • Gunnarsson, Gudmundur

    ()

    (Mälardalen's University College)

Registered author(s):

    Unlike previous analyses, we consider (i) that IT may affect productivity growth both directly and indirectly, through human capital interactions, and (ii) possible externalities in the use of IT. Examining, hypothetically, the statistical consequences of erroneously disregarding (i) and (ii) we shed light on the small or negative growth effects found in early U.S. studies, as well as the positive impacts reported 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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    File URL: http://swopec.hhs.se/iuiwop/papers/iuiwop0551.pdf
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    Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 551.

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    Length: 48 pages
    Date of creation: 27 Feb 2001
    Date of revision:
    Handle: RePEc:hhs:iuiwop:0551
    Contact details of provider: Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
    Phone: +46 8 665 4500
    Fax: +46 8 665 4599
    Web page: http://www.ifn.se/
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