Computer Networks and Productivity Revisited: Does Plant Size Matter? Evidence and Implications

24 Pages Posted: 9 Oct 2010

See all articles by Henry R. Hyatt

Henry R. Hyatt

U.S. Census Bureau - Center for Economic Studies

Sang V. Nguyen

U.S. Census Bureau

Date Written: September 1, 2010

Abstract

Numerous studies have documented a positive association between information technology (IT) investments and business- and establishment-level productivity, but these studies usually pay sole or disproportionate attention to small- or medium-sized entities. In this paper, we revisit the evidence for manufacturing plants presented in Atrostic and Nguyen (2005) and show that the positive relationship between computer networks and labor productivity is only found among small- and medium-sized plants. Indeed, for larger plants the relationship is negative, and employment-weighted estimates indicate computer networks have a negative relationship with the productivity of employees, on average. These findings indicate that computer network investments may have an ambiguous relationship with aggregate labor productivity growth.

JEL Classification: L6, O3

Suggested Citation

Hyatt, Henry R. and Nguyen, Sang V., Computer Networks and Productivity Revisited: Does Plant Size Matter? Evidence and Implications (September 1, 2010). US Census Bureau Center for Economic Studies Paper No. CES-WP-10-25, Available at SSRN: https://ssrn.com/abstract=1688327 or http://dx.doi.org/10.2139/ssrn.1688327

Henry R. Hyatt (Contact Author)

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

4700 Silver Hill Road
Washington, DC 20233
United States

Sang V. Nguyen

U.S. Census Bureau ( email )

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

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