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Computer networks and productivity revisited: Does plant size matter? Evidence and implications

Author

Listed:
  • Hyatt, Henry R.

    (U.S. Census Bureau)

  • Nguyen, Sang V.

    (U.S. Census Bureau)

Abstract

Numerous studies have documented a positive association between information technology investments and business- and establishment-level productivity. Most of these studies, however, rely on empirical specifications that over-represent small businesses. In this paper, we revisit one piece of evidence, the Computer Network Use Supplement to the 1999 U.S. Annual Survey of Manufactures, which has previously been used to show that there is a positive relationship between computer networks and productivity in manufacturing plants. We show that this is only true for small- and medium-sized plants, and that for larger plants the relationship is negative. We give critical consideration to alternative methods for weighting these data, and show that employment-weighted estimates indicate the presence of a computer network has, on average, a negative relationship with the productivity of employees.

Suggested Citation

  • Hyatt, Henry R. & Nguyen, Sang V., 2014. "Computer networks and productivity revisited: Does plant size matter? Evidence and implications," Journal of Economic and Social Measurement, IOS Press, issue 1-2, pages 87-104.
    • Handle: RePEc:ris:iosjes:0014
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    References listed on IDEAS

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    1. Dale W. Jorgenson & Kevin J. Stiroh, 2000. "Raising the Speed Limit: U.S. Economic Growth in the Information Age," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 31(1), pages 125-236.
    2. Erik Brynjolfsson & Thomas W. Malone & Vijay Gurbaxani & Ajit Kambil, 1994. "Does Information Technology Lead to Smaller Firms?," Management Science, INFORMS, vol. 40(12), pages 1628-1644, December.
    3. Erik Brynjolfsson & Lorin M. Hitt, 2003. "Computing Productivity: Firm-Level Evidence," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 793-808, November.
    4. Ilsoon Shin, 2006. "Adoption of Enterprise Application Software and Firm Performance," Small Business Economics, Springer, vol. 26(3), pages 241-256, April.
    5. Timothy Dunne & Lucia Foster & John Haltiwanger & Kenneth R. Troske, 2004. "Wage and Productivity Dispersion in United States Manufacturing: The Role of Computer Investment," Journal of Labor Economics, University of Chicago Press, vol. 22(2), pages 397-430, April.
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    Cited by:

    1. Emannuel Dhyne & Joep Konings & Joep Konings & Stijn Vanormelingen,, 2018. "IT and productivity: A firm level analysis," Working Paper Research 346, National Bank of Belgium.
    2. Prasanna Tambe & Lorin M. Hitt, 2012. "The Productivity of Information Technology Investments: New Evidence from IT Labor Data," Information Systems Research, INFORMS, vol. 23(3-part-1), pages 599-617, September.
    3. Konings, Jozef & Dhyne, Emmanuel & Van den bosch, Jeroen & ,, 2018. "The Return on Information Technology: Who Benefits Most?," CEPR Discussion Papers 13246, C.E.P.R. Discussion Papers.

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    More about this item

    Keywords

    Computer network; productivity; size; employment; information technology; manufacturing; internet;
    All these keywords.

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values

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