The Return on Information Technology: Who Benefits Most?



Konings, Jozef ORCID: 0000-0003-1280-4674, Dhyne, Emmanuel, Van den bosch, Jeroen and Vanormelingen, Stijn
(2021) The Return on Information Technology: Who Benefits Most? Information Systems Research, 32 (1). pp. 194-211.

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Abstract

<jats:p> Information and communication technology (ICT) has continuously reshaped the way in which businesses operate. Yet opinions among economists about the returns to ICT, especially at the aggregate level, are divided. We exploit business-to-business transaction panel data from ICT producers to construct ICT capital stocks for a large sample of Belgian firms. This allows us to estimate the returns to ICT at the firm level and to investigate how firm-level ICT investments affected aggregate gross domestic product and productivity. We find large returns to ICT—more precisely, a firm investing an additional euro in ICT—increases value added by 1 euro and 35 cents on average. This marginal product of ICT investment increases with firm size and varies across sectors. Although we find substantial returns to ICT at the firm level, returns are much lower at the aggregate level. This is due to underinvestment in ICT (ICT capital deepening is low) and because firms with especially high returns are underinvesting. </jats:p>

Item Type: Article
Uncontrolled Keywords: 8 Decent Work and Economic Growth
Depositing User: Symplectic Admin
Date Deposited: 07 Sep 2020 07:57
Last Modified: 17 Mar 2024 09:42
DOI: 10.1287/isre.2020.0960
Related URLs:
URI: https://livrepository.liverpool.ac.uk/id/eprint/3100234