Information Capital and the Value of Economic Organizations

Tsung-wu Ho

Brazilian Electronic Journal of Economics, 2001, vol. 4, issue 1

Abstract: Following Mendelson and Pillai (1999), we take the view that, in an information age, one of the main activities that organizations engage in is information processing. That is, the value of organization can be characterized by its organizational capacity of information processing, which is defined as information capital. The objective of this paper is to examine the shadow value problem of information capital. It is shown that, in the long-run, the value of economic organization is convergent to the cost savings of information processing.

Date: 2001
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