Productivity in Information Service Industries: a Panel Analysis of Japanese Firms

Futoshi Kurokawa and Kiyohiko G. Nishimura

Revue de l'OFCE, 2006, vol. 97 bis, issue 5, 351-371

Abstract: We examine factors determining productivity of information-technology service activities at firm level, using most comprehensive data of information service industries in Japan. We focus on the degree of modularisation and resulting outsourcing and economies/diseconomies of scale in software development, and changes. We find that outsourcing has persistent negative effects on total factor productivity, suggesting not only productivity-enhancing modularisation is not fully utilised but also productivity-hindering remnants of traditional main-contractor-subcontractor relations still prevail in Japanese information service industries. We also find diseconomies of scale in software development, suggesting less efficient communication among development team members. JEL Classification: L23, L25, L86, O33.

Keywords: information service industry; productivity; modularization and outsourcing; Japan; firm-level data (search for similar items in EconPapers)
JEL-codes: L23 L25 L86 O33 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (1)

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