Does IT Level the Playing Field for Small Establishments? Evidence from Manufacturing

49 Pages Posted: 6 Oct 2018

See all articles by Patricia Angle

Patricia Angle

Georgia Institute of Technology

Chris Forman

Cornell University - Dyson School of Applied Economics and Management; Georgia Institute of Technology - Scheller College of Business

Date Written: September 1, 2018

Abstract

We examine whether information technology investments benefit from economies of scale. Using U.S. Census non-public microdata, we examine the productivity benefits of IT investments for over 11,000 manufacturing plants over a nine year period. We find evidence that large plants exhibit differential productivity benefits from IT investments relative to smaller plants. These differences are robust to a range of alternative estimators and cannot be explained by cross-sectional variance in firm size, plant and firm age, and position in the supply chain. The results have important implications for small plants that firm-level studies have been unable to reveal.

Keywords: information technology, productivity, electronic commerce, plant size, economies of scale, manufacturing, total factor productivity

Suggested Citation

Angle, Patricia and Forman, Chris, Does IT Level the Playing Field for Small Establishments? Evidence from Manufacturing (September 1, 2018). Georgia Tech Scheller College of Business Research Paper No. 18-37. Available at SSRN: https://ssrn.com/abstract=3246142 or http://dx.doi.org/10.2139/ssrn.3246142

Patricia Angle (Contact Author)

Georgia Institute of Technology ( email )

Atlanta, GA 30332
United States

Chris Forman

Cornell University - Dyson School of Applied Economics and Management ( email )

Ithaca, NY
United States

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

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