Working Paper Series
Is Human Capital the Key to the IT Productivity Paradox?
(), Eleni Savvidiou
() and Gudmundur Gunnarsson
Abstract: Unlike previous analyses, we consider (i) that IT may
affect productivity growth both directly and indirectly, through human
capital interactions, and (ii) possible externalities in the use of IT.
Examining, hypothetically, the statistical consequences of erroneously
disregarding (i) and (ii) we shed light on the small or negative growth
effects found in early U.S. studies, as well as the positive impacts
reported 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
Keywords: IT-human Capital Complementarity; New Growth Theory; Applied Econometrics; (follow links to similar papers)
JEL-Codes: D24; J24; L60; (follow links to similar papers)
48 pages, February 27, 2001
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