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A neglected input to production: the role of ICT-schooled employees in firm performance

Author

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  • Eva Hagsten
  • Anna Sabadash

Abstract

Purpose - The purpose of this paper is to broaden the perspective on how information and communication technology (ICT) relates to productivity by introducing a novel ICT variable: the share of ICT-schooled employees in firms, an intangible input often neglected or difficult to measure. Design/methodology/approach - Based on a Cobb-Douglas production function specification, the association between the share of ICT-schooled employees and firm productivity is estimated by the use of unique comparable multi-linked firm-level data sets from statistical offices in six European countries for the period of 2001-2009. Findings - There are indications that the share of ICT-schooled employees significantly and positively relates to productivity, and also that this relationship is generally more persistent than that of ICT intensity of firms, measured as the proportion of broadband internet-enabled employees. However, the strength of the association varies across countries and demonstrates that underlying factors, such as industry structure and institutional settings might be of importance too. Research limitations/implications - Data features and the way to access harmonised firm-level data across countries affect the choice of econometric approach and output variable. Practical implications - The results emphasise the importance of specific ICT skills in firms independently of where in the organisation the employee works. Originality/value - Studies on associations between employees with specific (higher) education based on formal credentials and productivity are rare. Even more uncommon is the cross-country setting with harmonised data including general ICT intensity of firms.

Suggested Citation

  • Eva Hagsten & Anna Sabadash, 2017. "A neglected input to production: the role of ICT-schooled employees in firm performance," International Journal of Manpower, Emerald Group Publishing Limited, vol. 38(3), pages 373-391, June.
  • Handle: RePEc:eme:ijmpps:ijm-05-2015-0073
    DOI: 10.1108/IJM-05-2015-0073
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    Citations

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    Cited by:

    1. Schubert, Torben & Jäger, Angela & Türkeli, Serdar & Visentin, Fabiana, 2020. "Addressing the productivity paradox with big data: A literature review and adaptation of the CDM econometric model," MERIT Working Papers 2020-050, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    2. Hüseyin Taştan & Feride Gönel, 2020. "ICT labor, software usage, and productivity: firm-level evidence from Turkey," Journal of Productivity Analysis, Springer, vol. 53(2), pages 265-285, April.
    3. Filippo Pusterla & Ursula Renold, 2022. "Does ICT affect the demand for vocationally educated workers?," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 158(1), pages 1-22, December.
    4. Martin Falk & Eva Hagsten, 2021. "Innovation intensity and skills in firms across five European countries," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 11(3), pages 371-394, September.
    5. Pantea, Smaranda & Sabadash, Anna & Biagi, Federico, 2017. "Are ICT displacing workers in the short run? Evidence from seven European countries," Information Economics and Policy, Elsevier, vol. 39(C), pages 36-44.
    6. Eric J. Bartelsman & Martin Falk & Eva Hagsten & Michael Polder, 2019. "Productivity, technological innovations and broadband connectivity: firm-level evidence for ten European countries," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 9(1), pages 25-48, March.

    More about this item

    Keywords

    Skills; Information technology; Education; Human capital; Firm productivity; Broadband internet; Cross-country data; D2; I2; O3;
    All these keywords.

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • I2 - Health, Education, and Welfare - - Education
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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