It Investment and Firm Performance in U.S. Retail Trade

We examine the relationship between investments in information technology (IT) and two measures of retail firm performance: labor productivity and productivity growth over the 1992 to 1997 period. We use untapped firm and establishment micro data from the Censuses of Retail Trade and the Assets and Expenditures Survey. We show that large firms account for most retail IT investment, employment and establishment growth. We find evidence of a significant relationship between IT investment intensity and productivity growth. We found no evidence of a similar link between IT and growth in the number of establishments operated by retail firms.

Keywords: Information technology, retail trade, establishment growth

JEL Classification: O31, L81

Suggested Citation: Suggested Citation

Doms, Mark E. and Klimek, Shawn D. and Jarmin, Ron S., It Investment and Firm Performance in U.S. Retail Trade (November 2003). FRB of San Francisco Working Paper No. 2003-19, US Census Bureau Center for Economic Studies Paper No. CES-WP- 02-14, Available at SSRN: https://ssrn.com/abstract=550442 or http://dx.doi.org/10.2139/ssrn.550442