Research Report: Increasing Returns to Information Technology

Stephan Kudyba () and Romesh Diwan ()
Additional contact information
Stephan Kudyba: Null Sigma, Inc., Wayne, New Jersey 07470
Romesh Diwan: Rensselaer Polytechnic Institute, Troy, New York 12180

Information Systems Research, 2002, vol. 13, issue 1, 104-111

Abstract: This work analyzes firm-level investment in information technology and corresponding productivity through the use of a production function over the period from 1995-1997. The results are then compared to previous studies that utilized similar data and methodologies to compare productivity estimates over time. The analysis indicates that investment in IT enhances productivity over the period in question and has illustrated increasing returns over time. These findings are supported by the corresponding empirical analysis which yielded IT capital coefficients in a production function of (0.12, 0.16, 0.18) and IT flow coefficients in a similar function of (0.17, 0.24, 0.22) for the years 1995, 1996, and 1997, respectively. These results reflect the change in firm output given a one-percent change in the natural log of dollars invested in IT capital and flow, and are statistically significant.

Keywords: Productivity; Information Technology; Production Function; Efficiency; Innovation; Information Economy (search for similar items in EconPapers)
Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:orisre:v:13:y:2002:i:1:p:104-111

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