Productivity Effects of Organizational Change: Microeconometric Evidence

Bertschek, Irene; Kaiser, Ulrich

doi:10.2139/ssrn.329122

“…Similarly high ICT elasticities have been found in cross section regressions by Bertschek and Kaiser (2001) for a sample of firms in the business-related service sector. Applying a switching 28 Note that from the econometric point of view, a pooled regression corresponds to a simple cross-section regression except that a larger number of observations can be obtained from the inclusion of several years.…”

supporting

confidence: 67%

What's Spurious, What's Real? Measuring the Productivity Impacts of ICT at the Firm-Level

Hempell

¹

2002

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Die Discussion Papers dienen einer möglichst schnellen Verbreitung von neueren Forschungsarbeiten des ZEW. Die Beiträge liegen in alleiniger Verantwortung der Autoren und stellen nicht notwendigerweise die Meinung des ZEW dar.Discussion Papers are intended to make results of ZEW research promptly available to other economists in order to encourage discussion and suggestions for revisions. The authors are solely responsible for the contents which do not necessarily represent the opinion of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp0242.pdf Non-technical summaryThe rapidly increasing investment in information and communication technologies (ICT) and the fast diffusion of the internet during the past decade have entailed widespread hopes about a 'New Economy' ensuring large productivity gains and persistent output growth. Only the more recent economic downturn and the breakdown of once highly praised businesses have put these hopes into perspective.In order to get a more robust picture of the productivity effects of ICT, the potential insights from using aggregate statistics have turned out to be limited. The growth of real output of the most intensive ICT-using industries, like the service sector, is frequently understated by official statistics due to problems in accounting for quality changes appropriately. Moreover, aggregate statistics contain little information about complementary efforts by firms, like organizational changes and process re-engineering, which have been found to be important accompanying efforts for a productive use of the new technologies.Consequently, the empirical literature on the productivity impacts of ICT has been increasingly focussing on evidence at the firm-level. Since the mid 1990s, most of these studies have found evidence of significant productivity contributions of ICT. The quantitative results of these studies, however, differ to a large extent. These differences are not only due to varying samples of firms and to diverse definitions of ICT capital but also due to differences in the quantitative techniques that have been employed.In this paper, the importance of choosing the right methodological approach is explored in more detail. A variety of interfering factors like differing management abilities, measurement errors, simultaneity of input and output decisions by firms as well as business cycles may lead to distortions in the quantitative results. These effects are illustrated by applying different econometric techniques to a representative sample of observations from German service firms over the period from 1994 to 1999. The empirical analysis yields evidence that, once all the mentioned interfering influences are controlled for, ICT is found to have enhanced productivity in German services. However, these effects are substantially smaller than those obtained in various existing studies on the topic.What's Spurious, What's Real? Measuring the Productivity Impacts of ICT at the Firm-Level § Thomas HempellCentre for Euro...

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“…complementarities (e.g., Arvanitis, 2005;Bertschek and Kaiser, 2004;Bresnahan et al, 2002;Piva et al, 2005). According to Caroli (2001), who discusses in detail the role of the variables involved, ICT may be considered as the enabling factor triggering off a redesign of workplace organization.…”

Section: Introductionmentioning

confidence: 99%

The ‘new firm paradigm’ and the provision of training: The impact of ICT, workplace organization and human capital

Hollenstein

¹

,

Stucki

²

2012

Swiss J Economics Statistics

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Summary The paper analyzes the relevance of the three constituent elements of the ‘new firm paradigm’, i.e. ICT, workplace organization and human capital, as determinants of a firm’s provision of training. We concentrate on apprenticeship training, which in German-speaking countries is a widespread practice of skill formation. Econometric studies dealing with a firm’s provision of apprenticeships so far did not pay much attention to the influence of a shift towards the new paradigm. We find that apprenticeship training is an appropriate way of skill formation in advanced economies, but this may not be the case in leading-edge segments of the economy.

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“…6 To the knowledge of the author, the only related study are cross-section analyses by Licht and Moch (1999) and Bertschek and Kaiser (2001). 7 The most frequently applied proxies for ICT capital applied are the value of computers installed, book values of office, computing and accounting machinery (OCAM) from balance sheets and investment in ICT.…”

mentioning

confidence: 99%

What’s spurious, what’s real? Measuring the productivity impacts of ICT at the firm-level

Hempell

¹

2005

Empirical Economics

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Die Discussion Papers dienen einer möglichst schnellen Verbreitung von neueren Forschungsarbeiten des ZEW. Die Beiträge liegen in alleiniger Verantwortung der Autoren und stellen nicht notwendigerweise die Meinung des ZEW dar.Discussion Papers are intended to make results of ZEW research promptly available to other economists in order to encourage discussion and suggestions for revisions. The authors are solely responsible for the contents which do not necessarily represent the opinion of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp0242.pdf Non-technical summaryThe rapidly increasing investment in information and communication technologies (ICT) and the fast diffusion of the internet during the past decade have entailed widespread hopes about a 'New Economy' ensuring large productivity gains and persistent output growth. Only the more recent economic downturn and the breakdown of once highly praised businesses have put these hopes into perspective.In order to get a more robust picture of the productivity effects of ICT, the potential insights from using aggregate statistics have turned out to be limited. The growth of real output of the most intensive ICT-using industries, like the service sector, is frequently understated by official statistics due to problems in accounting for quality changes appropriately. Moreover, aggregate statistics contain little information about complementary efforts by firms, like organizational changes and process re-engineering, which have been found to be important accompanying efforts for a productive use of the new technologies.Consequently, the empirical literature on the productivity impacts of ICT has been increasingly focussing on evidence at the firm-level. Since the mid 1990s, most of these studies have found evidence of significant productivity contributions of ICT. The quantitative results of these studies, however, differ to a large extent. These differences are not only due to varying samples of firms and to diverse definitions of ICT capital but also due to differences in the quantitative techniques that have been employed.In this paper, the importance of choosing the right methodological approach is explored in more detail. A variety of interfering factors like differing management abilities, measurement errors, simultaneity of input and output decisions by firms as well as business cycles may lead to distortions in the quantitative results. These effects are illustrated by applying different econometric techniques to a representative sample of observations from German service firms over the period from 1994 to 1999. The empirical analysis yields evidence that, once all the mentioned interfering influences are controlled for, ICT is found to have enhanced productivity in German services. However, these effects are substantially smaller than those obtained in various existing studies on the topic.What's Spurious, What's Real? Measuring the Productivity Impacts of ICT at the Firm-Level § Thomas HempellCentre for Euro...

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Productivity Effects of Organizational Change: Microeconometric Evidence

Cited by 47 publications

References 21 publications

What's Spurious, What's Real? Measuring the Productivity Impacts of ICT at the Firm-Level

What's Spurious, What's Real? Measuring the Productivity Impacts of ICT at the Firm-Level

The ‘new firm paradigm’ and the provision of training: The impact of ICT, workplace organization and human capital

What’s spurious, what’s real? Measuring the productivity impacts of ICT at the firm-level

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