Computing Productivity: Firm-Level Evidence
We explore the effect of computerization on productivity and output growth using data from 527 large US firms over 1987-1994. We find that computerization makes a contribution to measured productivity and output growth in the short term (using one year differenc...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | en_US |
| Published: |
2004
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| Online Access: | http://hdl.handle.net/1721.1/5417 |
| _version_ | 1826205608949317632 |
|---|---|
| author | Brynjolfsson, Erik Hitt, Lorin M. |
| author_facet | Brynjolfsson, Erik Hitt, Lorin M. |
| author_sort | Brynjolfsson, Erik |
| collection | MIT |
| description | We explore the effect of computerization on productivity and output growth using data from 527 large US firms
over 1987-1994. We find that computerization makes a contribution to measured productivity and output growth
in the short term (using one year differences) that is consistent with normal returns to computer investments.
However, the productivity and output contributions associated with computerization are up to five times greater
over long periods (using five to seven year differences). The results suggest that the observed contribution of
computerization is accompanied by relatively large and time-consuming investments in complementary inputs, such
as organizational capital, that may be omitted in conventional calculations of productivity. The large long-run
contribution of computers and their associated complements that we uncover may partially explain the subsequent
investment surge in computers in the late 1990s. |
| first_indexed | 2024-09-23T13:15:48Z |
| format | Working Paper |
| id | mit-1721.1/5417 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T13:15:48Z |
| publishDate | 2004 |
| record_format | dspace |
| spelling | mit-1721.1/54172019-04-12T08:22:40Z Computing Productivity: Firm-Level Evidence Brynjolfsson, Erik Hitt, Lorin M. We explore the effect of computerization on productivity and output growth using data from 527 large US firms over 1987-1994. We find that computerization makes a contribution to measured productivity and output growth in the short term (using one year differences) that is consistent with normal returns to computer investments. However, the productivity and output contributions associated with computerization are up to five times greater over long periods (using five to seven year differences). The results suggest that the observed contribution of computerization is accompanied by relatively large and time-consuming investments in complementary inputs, such as organizational capital, that may be omitted in conventional calculations of productivity. The large long-run contribution of computers and their associated complements that we uncover may partially explain the subsequent investment surge in computers in the late 1990s. 2004-07-09T18:25:09Z 2004-07-09T18:25:09Z 2004-07-09T18:25:09Z Working Paper http://hdl.handle.net/1721.1/5417 en_US MIT Sloan School of Management Working Paper;4210-01 756296 bytes application/pdf application/pdf |
| spellingShingle | Brynjolfsson, Erik Hitt, Lorin M. Computing Productivity: Firm-Level Evidence |
| title | Computing Productivity: Firm-Level Evidence |
| title_full | Computing Productivity: Firm-Level Evidence |
| title_fullStr | Computing Productivity: Firm-Level Evidence |
| title_full_unstemmed | Computing Productivity: Firm-Level Evidence |
| title_short | Computing Productivity: Firm-Level Evidence |
| title_sort | computing productivity firm level evidence |
| url | http://hdl.handle.net/1721.1/5417 |
| work_keys_str_mv | AT brynjolfssonerik computingproductivityfirmlevelevidence AT hittlorinm computingproductivityfirmlevelevidence |