Computers, productivity and market structure

Luis Corchon and Simon Wilkie

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: Since the 1970's most industrialized countries have undertaken massiveinvestment in computers and information technology (IT). Several stylizedfacts emerge from the empirical studies, see Landauer, 1993. In particular,they have found that this investment has not lead to a general increase intotal factor productivity. This is known as the "productivity paradox". Also,some apparently inconsistent findings do emerge from these studies. Inparticular, the initial introduction of new IT by a firm tends to increase itsmarket share, and finally, there is evidence that while in most industriesproductivity has failed to increase, in monopolistic and regulated industriesthere is evidence that computers and IT have increased productivity. Wepresent a simple economic model of IT innovation. We find that in the model,measured productivity gains depends on rnarket structure. In fact the"productivity paradox" is most likely to emerge in markets dominated by asmall number of firms. It cannot emerge in either monopoly or highlycompetitive markets.

Keywords: Computers; productivity; slowdown; strategic investment (search for similar items in EconPapers)
Pages: 24 pages
Date: 1994-01
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Published by Ivie

Downloads: (external link)
http://www.ivie.es/downloads/docs/wpasad/wpasad-1994-17.pdf Fisrt version / Primera version, 1994 (application/pdf)

Related works:
Working Paper: Computers, Productivity and Market Structure (1994)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:1994-17

Access Statistics for this paper

More papers in Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) Contact information at EDIRC.
Bibliographic data for series maintained by Departamento de Edición ().