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Productivity, investment in ICT and market experimentation: micro evidence from Germany und the US

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  • Haltiwanger, John
  • Jarmin, Ron
  • Schank, Thorsten

Abstract

This paper examines the relationship between the use of advanced technologies such as ICT, and outcomes such as productivity, the skill mix of the workforce and wages using micro data for the U.S. and Germany. We find support to the idea that U.S. businesses engage in experimentation in a variety of ways not matched by their German counterparts. In particular, there is greater experimentation amongst young U.S. businesses and also among those actively changing their technology. This is evidenced in a greater dispersion in productivity and related key business choices. We also find that the mean impact of adopting new technology on productivity and wages is greater the in U.S. than in Germany.

Suggested Citation

  • Haltiwanger, John & Jarmin, Ron & Schank, Thorsten, 2003. "Productivity, investment in ICT and market experimentation: micro evidence from Germany und the US," Discussion Papers 19, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  • Handle: RePEc:zbw:faulre:19
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    References listed on IDEAS

    as
    1. Shawn D Klimek & Ron S Jarmin & Mark E Doms, 2002. "IT Investment and Firm Performance in U.S. Retail Trade," Working Papers 02-14, Center for Economic Studies, U.S. Census Bureau.
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    6. Haltiwanger, John & Jarmin, Ron & Schank, Thorsten, 2003. "Productivity, investment in ICT and market experimentation: micro evidence from Germany und the US," Discussion Papers 19, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    7. Eric Bartelsman & Stefano Scarpetta & Fabiano Schivardi, 2005. "Comparative analysis of firm demographics and survival: evidence from micro-level sources in OECD countries," Industrial and Corporate Change, Oxford University Press, vol. 14(3), pages 365-391, June.
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    11. Ron S Jarmin & Javier Miranda, 2002. "The Longitudinal Business Database," Working Papers 02-17, Center for Economic Studies, U.S. Census Bureau.
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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. Keiko Ito & Sébastien Lechevalier, 2009. "The evolution of the productivity dispersion of firms: a reevaluation of its determinants in the case of Japan," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 145(3), pages 405-429, October.
    3. Eric J. Bartelsman & John Haltiwanger & Stefano Scarpetta, 2004. "Microeconomic Evidence of Creative Destruction in Industrial and Developing Countries," Tinbergen Institute Discussion Papers 04-114/3, Tinbergen Institute.
    4. Nicholas Bloom & Raffaella Sadun & John Van Reenen, 2012. "Americans Do IT Better: US Multinationals and the Productivity Miracle," American Economic Review, American Economic Association, vol. 102(1), pages 167-201, February.
    5. Maliranta, Mika & Määttänen, Niku, 2013. "Allocation and industry productivity: Accounting for firm turnover," ETLA Working Papers 11, The Research Institute of the Finnish Economy.
    6. Markus Poschke & Alain Gabler, 2011. "Growth through Experimentation," 2011 Meeting Papers 643, Society for Economic Dynamics.
    7. Leonardo Iacovone & Mariana Pereira-López & Marc Schiffbauer, 2017. "ICT Use, Competitive Pressures, and Firm Performance in Mexico," World Bank Economic Review, World Bank Group, vol. 30(Supplemen), pages 109-118.
    8. Poschke, Markus, 2009. "Employment protection, firm selection, and growth," Journal of Monetary Economics, Elsevier, vol. 56(8), pages 1074-1085, November.
    9. Philippe Aghion & Thibault Fally & Stefano Scarpetta, 2007. "Credit constraints as a barrier to the entry and post-entry growth of firms," Economic Policy, CEPR;CES;MSH, vol. 22, pages 731-779, October.
    10. Anna Sabadash, 2013. "ICT-induced Technological Progress and Employment: A Literature Review," JRC Working Papers on Digital Economy 2013-07, Joint Research Centre (Seville site).
    11. Haltiwanger, John & Jarmin, Ron & Schank, Thorsten, 2003. "Productivity, investment in ICT and market experimentation: micro evidence from Germany und the US," Discussion Papers 19, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    12. Iacovone,Leonardo & Pereira Lopez,Mariana De La Paz & Schiffbauer,Marc Tobias & Iacovone,Leonardo & Pereira Lopez,Mariana De La Paz & Schiffbauer,Marc Tobias, 2016. "Competition makes IT better : evidence on when firms use it more effectively," Policy Research Working Paper Series 7638, The World Bank.
    13. Dirk Pilat, 2005. "Canada's Productivity Performance in International Perspective," International Productivity Monitor, Centre for the Study of Living Standards, vol. 10, pages 24-44, Spring.
    14. Anna Sabadash, 2013. "ICT-induced Technological Progress and Employment: a Happy Marriage or a Dangerous Liaison? A Literature Review," JRC Working Papers JRC76143, Joint Research Centre (Seville site).
    15. Eric Bartelsman & John Haltiwanger & Stefano Scarpetta, 2013. "Cross-Country Differences in Productivity: The Role of Allocation and Selection," American Economic Review, American Economic Association, vol. 103(1), pages 305-334, February.

    More about this item

    Keywords

    ICT; Experimentation; Productivity; Internet Use; U.S.; Germany;

    JEL classification:

    • D20 - Microeconomics - - Production and Organizations - - - General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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