Source:
Review of Economics and Statistics, Volume 85, Issue 4, p.793-808 (2003)
Abstract:
Abstract—We explore the effect of computerization on productivity and
output growth using data from 527 large U.S. firms over 1987–1994. We
find that computerization makes a contribution to measured productivity
and output growth in the short term (using 1-year differences) that is
consistent with normal returns to computer investments. However, the
productivity and output contributions associated with computerization are
up to 5 times greater over long periods (using 5- to 7-year differences).
The results suggest that the observed contribution of computerization is
accompanied by relatively large and time-consuming investments in
complementary inputs, such as organizational capital, that may be omitted
in conventional calculations of productivity. The large long-run contribution
of computers and their associated complements that we uncover may
partially explain the subsequent investment surge in computers in the late 1990s.
Notes:
Posted version is an earlier draft. Please obtain and cite the published version