Are digital-using UK firms more productive?

Diane Coyle, Kieran Lind, David Nguyen and Manuel Tong

Economic Statistics Centre of Excellence (ESCoE) Discussion Papers from Economic Statistics Centre of Excellence (ESCoE)

Abstract: One possible explanation for the productivity slowdown in advanced economies coinciding with widespread digital adoption is that firms need time to change organisational structures or processes to use the new technologies effectively. Using a unique UK firm-level data set, we explore the links between a large set of digital inputs and investments and productivity. We found that large firms are more digital-intensive than small ones and that digital adopters do have higher productivity than non-adopters, but the nature of the digital variables matters. Those reflecting in-house capabilities are positively related to firm-level total factor productivity (TFP) while those indicating bought-in ones are negatively related. This finding that firms' capabilities matter for the impact of digital adoption on productivity takes advantage of the wide range of digital variables we were able to use, and points to the need for future research on the role of digital technology in driving productivity to take account of organisational capabilities.

Keywords: digital; organisation; productivity (search for similar items in EconPapers)
JEL-codes: D22 O33 O40 (search for similar items in EconPapers)
Date: 2022-03
New Economics Papers: this item is included in nep-dem, nep-eff, nep-pay, nep-sbm and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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