Computer Network Use and Firms' Productivity Performance: The United States vs. Japan

38 Pages Posted: 19 Sep 2008

See all articles by B. K. Atrostic

B. K. Atrostic

U.S. Census Bureau - Center for Economic Studies

Kazuyuki Motohashi

University of Tokyo - Research Center for Advanced Science and Technology (RCAST)

Sang V. Nguyen

U.S. Census Bureau

Date Written: September 1, 2008

Abstract

This paper examines the relationship between computer network use and firms' productivity performance, using micro-data of the United States and Japan. To our knowledge, this is the first comparative analysis using firm-level data for the manufacturing sector of both countries. We find that the links between IT and productivity differ between U.S. and Japanese manufacturing. Computer networks have positive and significant links with labor productivity in both countries. However, that link is roughly twice as large in the U.S. as in Japan. Differences in how businesses use computers have clear links with productivity for U.S. manufacturing, but not in Japan. For the United States, the coefficients of the intensity of network use are positive and increase with the number of processes. Coefficients of specific uses of those networks are positive and significant. None of these coefficients are significant for Japan. Our findings are robust to alternative econometric specifications. They also are robust to expanding our sample from single-unit manufacturing firms, which are comparable in the two data sets, to the entire manufacturing sector in each country, as well as to the wholesale and retail sector of Japan.

Suggested Citation

Atrostic, B. K. and Motohashi, Kazuyuki and Nguyen, Sang V., Computer Network Use and Firms' Productivity Performance: The United States vs. Japan (September 1, 2008). US Census Bureau Center for Economic Studies Paper No. CES-WP- 08-30, Available at SSRN: https://ssrn.com/abstract=1269425 or http://dx.doi.org/10.2139/ssrn.1269425

B. K. Atrostic (Contact Author)

U.S. Census Bureau - Center for Economic Studies ( email )

4700 Silver Hill Road
Washington, DC 20233
United States

Kazuyuki Motohashi

University of Tokyo - Research Center for Advanced Science and Technology (RCAST) ( email )

Room 206, 2nd Floor, Building 13
4-6-1 Komaba Megro-ku
Tokyo 153-8904
Japan

Sang V. Nguyen

U.S. Census Bureau ( email )

Suitland Federal Center
Washington, DC 20233
United States
(301) 763-1882 (Phone)

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