Hostname: page-component-78c5997874-mlc7c Total loading time: 0 Render date: 2024-11-15T16:24:27.909Z Has data issue: false hasContentIssue false
  • English
  • Français

The Impact of ICT Investment on Establishment Productivity

Published online by Cambridge University Press:  26 March 2020

Thomas Zwick
Thomas Zwick*
Affiliation:
Centre for European Economic Research (ZEW), Mannheim, Germany
*
e-mail: zwick@zew.de
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper finds substantial effects of ICT investments on productivity for a large and representative German establishment panel data set. In contrast to the bulk of the literature also establishments without ICT capital are included and lagged effects of ICT investments are analysed. In addition, a broad range of establishment and employee characteristics are taken account of in order to avoid omitted variable bias. It is shown that taking into account unobserved heterogeneity of the establishments and endogeneity of ICT investments increases the estimated lagged productivity impact of ICT investments.

Type
Articles
Information
National Institute Economic Review , Volume 184 , April 2003 , pp. 99 - 110
Copyright
Copyright © 2003 National Institute of Economic and Social Research

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

∗

I would like to express my gratitude to the Institut für Arbeitsmarkt- und Berufsforschung (IAB) for enabling access to the IAB establishment panel. I also thank Andries de Grip, Thomas Hempell, Heinz Hollenstein, Petri Rouvinen, Michela Vecchi, Elke Wolf and the editors of the Review for useful comments.

References

Addison, J., Siebert, W., Wagner, J. and Wie, X. (2000), ‘Worker participation and firm performance: evidence from Germany and Britain’, British Journal of Industrial Relations, 83, 1, pp. 7–48.CrossRefGoogle Scholar
Anderson, T. and Hsiao, C. (1981), ‘Formulation and estimation of dynamic models using panel data’, Journal of the American Statistical Association, 76, pp. 598–606.Google Scholar
Black, S. and Lynch, L. (2001), ‘How to compete: the impact of workplace practices and information technology on productivity’, Review of Economics and Statistics, 83, pp. 434–445.CrossRefGoogle Scholar
Bresnahan, T.F., Brynjolfsson, E. and Hitt, L.M. (2002), ‘Information technology, workplace organisation, and the demand of skilled labor: firm-level evidence’, Quarterly Journal of Economics, 117, pp. 339–376.CrossRefGoogle Scholar
Bresnahan, T.F., Brynjolfsson, E. and Hitt, L.M. (1995), ‘Information technology as a factor of production: the role of differences among firms’, Economics of Innovation and New Technology, 3, pp. 183–200.Google Scholar
Bresnahan, T.F., Brynjolfsson, E. and Hitt, L.M. (1996), ‘Paradox lost? Firm-level evidence of high returns to information systems spending’, Management Science, 42, 4, pp. 541–558.Google Scholar
Bresnahan, T.F., Brynjolfsson, E. and Hitt, L.M. (1998), ‘Computing productivity: are computers pulling their weight?’, mimeo MIT, Cambridge, MA.Google Scholar
Bresnahan, T.F., Brynjolfsson, E. and Hitt, L.M. (2000a), ‘Beyond computation: information technology, organisational transformation and business performance’, Journal of Economic Perspectives, 14, 4, pp. 23–48.Google Scholar
Bresnahan, T.F., Brynjolfsson, E. and Hitt, L.M. (2000b), ‘Computing productivity: firm-level evidence’, MIT Discussion Paper no. 139, Cambridge, MA.Google Scholar
Cappelli, P. and Neumark, D. (2000), Do ‘High performance’ work practices improve establishment-level outcomes?, mimeo.CrossRefGoogle Scholar
Card, D. (1999), ‘The causal effect of education on earnings’, in Ashenfelter, O. and Card, D. (eds), Handbook of Labor Economics, vol. 3, Amsterdam, Elsevier, pp. 1801–1863.Google Scholar
Caroli, E. and Van Reenen, J. (2001), ‘Skill biased organisational change?: evidence from a panel of British and French establishments’, The Quarterly Journal of Economics, 116, 4, pp. 1449–1492.Google Scholar
Dearden, L., Reed, H. and Van Reenen, J. (2000), ‘Who gains when workers train? Training and corporate productivity in a panel of British industries’, IFS Working Paper 00/01, London.Google Scholar
Doms, M., Dunne, T. and Troske, K.R. (1997), ‘Workers, wages, and technology,’, Quarterly Journal of Economics, 112, pp. 253–290.CrossRefGoogle Scholar
Greenan, N. and Mairesse, J. (1996), ‘Computers and productivity in France: some evidence’, National Bureau of Economic Research Working Paper 5836.CrossRefGoogle Scholar
Griliches, Z. and Hausman, J.A. (1986), ‘Errors in variables in panel data’, Journal of Econometrics, 31, pp. 93–118.CrossRefGoogle Scholar
Griliches, Z. and Mairesse, J. (1998), ‘Production functions: the search for identification’, in Str⊘m, S. (ed.), Econometrics and Economic Theory in the 20th Century, Cambridge, Cambridge University Press, pp. 169–203.CrossRefGoogle Scholar
Hempell, T. (2002), ‘What's spurious, what's real? Measuring the productivity impacts of ICT at the firm-level’, ZEW Discussion Paper 02-42, Mannheim.CrossRefGoogle Scholar
Hitt, L. and Brynjolfsson, E. (2002), ‘Information technology, organisational transformation, and business performance’, in Greenan, N., L'Horty, Y. and Mairesse, J. (eds), Productivity, Inequality, and the Digital Economy, Cambridge, MA, MIT Press, pp. 55–92.Google Scholar
Hollenstein, H. (2002), ‘The decision to adopt information and communication technologies (ICT) - explanation and policy conclusions’, mimeo, Zürich.Google Scholar
Huselid, M. (1995), ‘The impact of human resource management practices on turnover, productivity, and corporate financial performance’, Academy of Management Journal, 38, pp. 635–672.Google Scholar
Ichniowski, C., Shaw, K. and Prennushi, G. (1997), ‘The effects of human resource management practices on productivity: a study of steel finishing lines’, American Economic Review, 87, pp. 291–313.Google Scholar
Lichtenberg, F.R. (1995), ‘The output contribution of computer equipment and personnel: a firm-level analysis’, Economics of Innovation and New Technology, 3, pp. 201–217.CrossRefGoogle Scholar
Kölling, A. (2000), ‘The IAB establishment panel’, Schmollers Jahrbuch, 120, pp. 291–300.Google Scholar
MacDuffie, J. (1995), ‘Human resource bundles and manufacturing performance: organisational logic and flexible production systems in the world auto industry’, Industrial and Labor Relations Review, 48, pp. 197–221.CrossRefGoogle Scholar
McNabb, R. and Whitfield, K. (1999), ‘High performance work systems: disentangling the bundles’, Cardiff, Cardiff Business School, mimeo.Google Scholar
O'Mahony, M. (2002), ‘Productivity and convergence in the EU’, National Institute Economic Review, 180, pp. 72–82.CrossRefGoogle Scholar
O'Mahony, M. and Vecchi, M. (2002), ‘Do intangible investments affect companies' productivity performance?’, NIESR Discussion Paper 201, National Institute of Economic and Social Research.Google Scholar
Osterman, P. (1994), ‘How common is workplace transformation and who adopts it?’, Industrial and Labor Relations Review, 47, pp. 173–188.Google Scholar
Wolf, E. and Zwick, T. (2002), ‘Reassessing the impact of high performance workplaces’, ZEW Discussion Paper 02-07, Mannheim.CrossRefGoogle Scholar
Youndt, M.A., Snell, S.A., Dean, J.W. and Lepak, D.P. (1996), ‘Human resource management, manufacturing strategy, and firm performance’, Academy of Management Journal, 39, pp. 836–866.Google Scholar
Zwick, T. (2002), ‘Training and firm productivity - panel evidence for Germany’, ZEW Discussion Paper 02-50, Mannheim.Google Scholar
Zwick, T. (2003), ‘Training - a strategic enterprise decision?’, in Fandel, G. (ed.), Managing Enterprises of the New Economy by Modern Concepts of the Theory of the Firm, Heidelberg, Springer-Verlag (forthcoming).Google Scholar