Evaluating Computer's Productivity for Portuguese Firms

摘要

The information systems "productivity paradox" is based on first generation studies that found no positive relationship, or an insignificant one, between firm productivity and spending on IS (information systems). However, some recent studies have found a positive relationship. Given the large amounts spent by organizations on information systems, it is important to understand the relationship between spending on IS and productivity. Data collected by the Portuguese National Institute of Statistics is analyzed to investigate the relationship between Portuguese firms' productivity and spending on computers. This link is analysed using the usual Cobb-Douglas production function framework. First, the overall relationship is investigated using data on all firms and then we estimate the same model sector by sector. We find a positive elasticity of output for computer capital at the firm level. This relationship is also shown to vary significantly across the different economic sectors.rnWe also consider a model in which several employee characteristics are taken into account in order to capture complementary effects. We find that these effects matter and that educational attainment, when combined with computers investment is particular relevant to explain firm's productivity.rnBecause the relationship between productivity and computer spending varies significantly across economic sectors, sector mix is shown to be an important data characteristic that may have influenced results in the first generation studies.