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The Return on Information Technology: Who Benefits Most?

Journal Contribution - Journal Article

This paper uses a new microdata set of B2B firm-level transactions in Belgium to construct a measure of ICT investment at the firm level, which we combine with the income statement of firms to analyze the impact of ICT on productivity. We find that 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. While we find substantial returns of ICT at the firm level, such returns are much lower at the aggregate level. This is due to underinvestment in ICT (ICT capital deepening is low) and misallocation of ICT investments.
Journal: Information Systems Research
ISSN: 1047-7047
Issue: 1
Volume: 32
Pages: 194 - 211
Publication year:2021
BOF-keylabel:yes
IOF-keylabel:yes
BOF-publication weight:6
CSS-citation score:1
Authors:International
Authors from:Government, Private, Higher Education
Accessibility:Open