The Review of Economics and Statistics Vol. 85 No. 4 2003
Computing Productivity: Firm-Level Evidence
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.
- DOI
- 10.1162/003465303772815736
- Volume
- 85
- Issue
- 4
- Pages
- 793-808
- Language
- en
- Sources
- crossref openalex