Americans Do I.T. Better: US Multinationals and the Productivity Miracle

Nicholas Bloom (), Raffaella Sadun () and John van Reenen ()

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: The US has experienced a sustained increase in productivity growth since the mid-1990s, particularly in sectorsthat intensively use information technologies (IT). This has not occurred in Europe. If the US "productivitymiracle" is due to a natural advantage of being located in the US then we would not expect to see any evidenceof it for US establishments located abroad. This paper shows in fact that US multinationals operating in the UKdo have higher productivity than non-US multinationals in the UK, and this is primarily due to the higherproductivity of their IT. Furthermore, establishments that are taken over by US multinationals increase theproductivity of their IT, whereas observationally identical establishments taken over by non-US multinationalsdo not. One explanation for these patterns is that US firms are organized in a way that allows them to use newtechnologies more efficiently. A model of endogenously chosen organizational form and IT is developed toexplain these new micro and macro findings.

Keywords: Productivity; Information Technology; multinationals; organization (search for similar items in EconPapers)
JEL-codes: E22 O3 O47 O52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eff, nep-ino and nep-mac
Date: 2007-04
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Working Paper: Americans Do I.T. Better: US Multinationals and the Productivity Miracle (2007)
Working Paper: Americans Do I.T. Better: US Multinationals and the Productivity Miracle (2007)
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Persistent link: http://EconPapers.repec.org/RePEc:cep:cepdps:dp0788

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