Working Paper Series
IFAU - Institute for Evaluation of Labour Market and Education Policy
Human capital is the key to the IT productivity paradox
(), Erik Mellander
() and Eleni Savvidou
Abstract: Unlike previous analysis, we consider (i) possible
externalities in the use of IT and (ii) IT and human capital interactions.
Examining, hypothetically, the statistical consequences of erroneously
disregarding (i) and (ii) we shed light on the small or negative growth
effects found in early studies of the effects of IT on productivity growth,
as well as the positive impacts reported more recently. Our empirical
analysis uses a 14-industry panel for Swedish manufacturing 1986–95. We
find that human capital developments made the average effect of IT
essentially zero in 1986 and steadily increasing thereafter, and, also,
generated large differences in growth effects across industries.
Keywords: IT productivity paradox; applied econometrics; (follow links to similar papers)
JEL-Codes: L23; L60; O33; (follow links to similar papers)
60 pages, October 4, 2004
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