Abstract

http://ssrn.com/abstract=1180722
 
 

References (47)



 
 

Citations (9)



 


 



The Productivity of Information Technology Investments: New Evidence from IT Labor Data


Prasanna Tambe


New York University (NYU) - Leonard N. Stern School of Business; New York University (NYU) - Department of Information, Operations, and Management Sciences

Lorin M. Hitt


University of Pennsylvania - Operations & Information Management Department

February 1, 2011

Information Systems Research, 23(3-1), 599-617, 2012.

Abstract:     
This paper uses newly collected panel data that allow for significant improvements in the measurement and modeling of IT productivity to address some long-standing empirical limitations in the IT business value literature. First, we show that using GMM-based estimators to account for the endogeneity of IT spending produces coefficient estimates that are only about 10% lower than unadjusted estimates, suggesting that the effects of endogeneity on IT productivity estimates may be relatively small. Second, analysis of the expanded panel suggests that a) IT returns are substantially lower in small and mid-size firms than in Fortune 500 firms, b) that they materialize more slowly in large firms -- unlike in larger firms, the short-run contribution of IT to output in small and mid-size firms is similar to the long-run output contribution, and c) that the measured marginal product of IT spending is higher from 2000-2006 than in any previous period, suggesting that firms, and especially large firms, have been continuing to develop new, valuable IT-enabled business process innovations. Furthermore, we show that the productivity of IT investments is higher in manufacturing sectors, and that our productivity results are robust to controls for IT labor quality and outsourcing levels.

Number of Pages in PDF File: 41

Keywords: Information Technologies, Production Function, IT Workers, Productivity

Accepted Paper Series


Download This Paper

Date posted: July 28, 2008 ; Last revised: February 20, 2013

Suggested Citation

Tambe, Prasanna and Hitt, Lorin M., The Productivity of Information Technology Investments: New Evidence from IT Labor Data (February 1, 2011). Information Systems Research, 23(3-1), 599-617, 2012.. Available at SSRN: http://ssrn.com/abstract=1180722

Contact Information

Prasanna Tambe (Contact Author)
New York University (NYU) - Leonard N. Stern School of Business ( email )
44 West 4th Street
New York, NY NY 10012
United States

New York University (NYU) - Department of Information, Operations, and Management Sciences ( email )
44 West Fourth Street
New York, NY 10012
United States
Lorin M. Hitt
University of Pennsylvania - Operations & Information Management Department ( email )
571 Jon M. Huntsman Hall
Philadelphia, PA 19104
United States
215-898-7730 (Phone)
509-267-9192 (Fax)

Feedback to SSRN


Paper statistics
Abstract Views: 1,956
Downloads: 516
Download Rank: 27,873
References:  47
Citations:  9

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo4 in 0.500 seconds