The Effect of Adjustment Costs and Organizational Change on Productivity in Canada: Evidence from Aggregate Data

Danny Leung

International Productivity Monitor, 2004, vol. 9, 52-61

Abstract: Danny Leung of the Bank of Canada provides support for the hypothesis that organizational change is a necessary condition for the full realization of the productivity gains associated with ICT. Using aggegate data, the author finds econometric evidence that the impact of computer investment is not fully realized until three years after the initial investment. Firms appear to need a learning period during which they make the necessary adjustments to their organizational structures in order to benefit from the productivity-augmenting potential of ICT. One implication of this analysis is that despite the current lull in investment, productivity growth in Canada should continue to remain fairly robust as firms continue to integrate new technologies into their production processes.

Keywords: Organizational Change; Productivity; Productivity Growth; Multifactor Productivity; Information Technology; Information and Communication Technologies; ICT; Investment; New Technology (search for similar items in EconPapers)
JEL-codes: D24 M11 O32 O47 O51 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (18)

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Working Paper: The Effect of Adjustment Costs and Organizational Change on Productivity in Canada: Evidence from Aggregate Data (2004)
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