The Return on Information Technology: Who Benefits Most?

Jozef Gerard L Konings, Emmanuel Dhyne, Stijn Vanormelingen, Jeroen Van den Bosch

Research output: Working paperDiscussion paper

Abstract

Using a novel comprehensive data set of IT investment at the firm level, we find that a firm investing an additional euro in IT increases value added by 1 euro and 38 cents on average. This marginal product of IT investment increases with firm size and varies across sectors. IT explains about 10% of productivity dispersion across firms. While we find substantial returns of IT at the firm level, such returns are much lower at the aggregate level. This is due to underinvestment in IT (IT capital deepening is low) and misallocation of IT investments.
Original languageEnglish
Publication statusPublished - 2018

Publication series

NameCentre for Economic Policy Research
No.13246

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