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American Economic Review Vol. 102 No. 1 2012

Americans Do IT Better: US Multinationals and the Productivity Miracle

Nicholas Bloom1; Raffaella Sadun2; John Van Reenen3

1 Department of Economics, Stanford University, 579 Serra Mall, Stanford, CA 94305-6072, Centre for Economic Performance, CEPR, and NBER. · 2 Harvard Business School, Soldiers Field, Boston, MA 02163, Centre for Economic Performance and NBER. · 3 London School of Economics, Centre for Economic Performance, Houghton Street, London WC2A 2AE, UK, CEPR, and NBER.

Abstract

US productivity growth accelerated after 1995 (unlike Europe's), particularly in sectors that intensively use information technologies (IT). Using two new micro panel datasets we show that US multinationals operating in Europe also experienced a “productivity miracle.” US multinationals obtained higher productivity from IT than non-US multinationals, particularly in the same sectors responsible for the US productivity acceleration. Furthermore, establishments taken over by US multinationals (but not by non-US multinationals) increased the productivity of their IT. Combining pan-European firm-level IT data with our management practices survey, we find that the US IT related productivity advantage is primarily due to its tougher “people management” practices.

DOI
10.1257/aer.102.1.167
Volume
102
Issue
1
Pages
167-201
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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