Search results

Since the 1970s productivity growth in most economies slowed, while information and communication technology expenditures increased: the “information technology (IT) productivity paradox.” Some researchers reported an end to the paradox, but this is most likely due to IT industry growth approaching the Year 2000 phenomenon. The purpose of this paper is to update IT productivity paradox research.

For comparability this research replicates methods employed by previous studies but employs a two-level approach: first macroeconomic indicators; second labor and multi-factor productivity.

Findings suggest IT investment has high positive correlation with gross domestic product growth, but not labor or multi-factor productivity. This ambiguity suggests the paradox is still poorly understood.

The findings are not conclusive; the authors cannot confirm or reject the existence of the productivity paradox. The global recession and banking crisis makes it prudent to wait until recovery before analyzing data from that period.

Lack of convincing evidence supporting positive effects from IT investment suggests some firms benefit from IT investment, but not others, and that IT investment has questionable returns.

Firm level studies might find IT investment benefits some firms, but lack of convincing macroeconomic level evidence of positive effects of IT investment suggests the paradox still exists.

This research updates the IT productivity paradox demonstrating the phenomenon is still poorly understood and thus worthy of further study, questioning the benefits of IT investment for industry and national economies.

From the early 1980s to the late 1990s overall productivity rates did not reflect the rising investment in information and computer technology (ICT). This paradox, the productivity paradox, which was widely discussed among economists may well turn out to be mainly a mirage once the assumption is excluded that investment has a short‐run effect on productivity. The apparent productivity paradox seems to be rooted in an ICT infrastructure that is inadequate and in an increase in income disparities that thwart the realization of economies of scale.

The purpose of this paper is to provide an engineering perspective on the modern productivity paradox. Specifically, to shed new light on the failure of information and communication technology (ICT) to increase overall factor productivity.

To this end, alternative approaches to modeling material processes are presented and discussed. Empirical evidence is brought to bear on the question of ICT productivity. Finally, the implication of the findings for production and management technology are presented and discussed.

The principal finding is theoretical in nature, namely that, according to classical mechanics and applied physics, ICT is not physically productive. Rather, information is an organizational input.

By identifying the role of ICT in material processes, the paper provides a framework to better understand and evaluate ICT investment, both at the firm and industry level. While ICT does not contribute to increasing physical output, it does nonetheless increase profitability. On a broader level, the paper provides a framework to evaluate ICT‐related public policy measures.

Among the contributions of the paper are the use of basic engineering principles to shed light on the modern productivity paradox; and the conclusion that information, unlike energy, is not physically productive and as such cannot be counted upon to increase output.

Information Technology has transformed the banking sector with respect to various systems and processes. Banks have adopted various measures to quicken their business activity and also save cost and time. That is why there has been large requirement of IT in the banking sector. The question arises whether this investment is enhancing the profitability of the bank or not. The purpose of this paper is to examine the presence of profitability paradox in Indian Banking Sector.

Data are collected from ten nationalized banks and three private sector banks from 2006 to 2013. The impact of IT expenditure on return on assets and profit efficiency is examined. Profit efficiency is determined using Stochastic Frontier Analysis. Data are collected from annual reports of the banks. Data on IT expenditure are collected through Right to Information Act 2005. Correlation and Panel Regression are used to investigate the relationship between IT expenditure and ROE or Profit Efficiency.

The findings of the paper confirm the presence of profitability paradox in the Indian Banking sector.

Extension of this study to other developing countries of the world will help to identify if any common pattern is there among the developing countries as far as productivity or profitability paradox is concerned.

There are some studies on the impact of IT on the banking sector in USA and Europe. This type of study however is rare in the context of India or for that matter other developing countries. Therefore, this paper will add new dimension to the existing literature and pave the way for future research in this area.

Looks at why investment in the work environment is important to the success of investment in information technology. Begins by looking at the history of the use of computers in the office environment, detailing in particular how the introduction of computers has altered office practices. Goes on to discuss the productivity paradox of knowledge workers, that is the ways in which management of the office environment enables productivity to increase.

Prior IT productivity research usually assumes constant returns on IT investment. This study suggests that the impact of IT investment on productivity may not be constant but may change with the IT investment scale and over time. Specifically, we divide IT investment into commercial IT and in-house IT and investigate their changing impacts on industry labor productivity.

A model of the productivity impacts of commercial IT and in-house IT with changing effects of scale and over time is developed and empirically tested based on industry-level panel data from the US. Bureau of Economic Analysis (BEA).

The returns on commercial IT investment increase with scale but decrease over time, while the returns on in-house IT increase over time.

This study provides a new perspective for IT productivity research by investigating the changing productivity impacts of IT investment. It also suggests that commercial IT and in-house IT should be distinguished, as they have different impacts on productivity.

The authors provide firm-level evidence that external financing affects international trade in a way different from internal financing.

The authors separate new entrants from incumbent exporters and investigate the roles of external and internal financing in export market participation and export quantity.

The authors find that external financing is of particular importance, as well as internal financing, in helping a firm become a new exporter. By contrast, external financing, unlike internal financing, is not significantly important for an incumbent exporter to stay in the international market. Regarding export quantity, a firm's internal financing is positively associated with more export quantity, whereas external financing is not.

The authors’ findings are consistent with the existence of significant fixed cost for entering the export market and external financing is particularly needed to cover such cost. Meanwhile, the financial need for maintaining the export status is much less and can be satisfied via internal financing.

There are manifold causal linkages between information and communications technologies (ICTs) and social sustainability. In this article, these linkages are classified into three areas: direct improvement of corporate productivity, changed behaviour of people/organizations, and improved decision‐making capabilities within society. A framework is proposed to analyse the first two of these three linkages, together with the results of a questionnaire survey. These point to a continuous growth trend in Japanese ICT investment with sectoral variations, and statistically significant evidence of ICTs’ contributions to corporate operations and environmental issues.

The purpose of this paper is to provide evidence of the influence of different e‐business technologies on capital productivity (CP). Productivity measurement is a useful tool to gauge business performance. However, currently there is little empirical evidence to support the impact of e‐business technologies on productivity.

In this paper, an empirical investigation of 132 small and medium enterprises (SMEs) in the UK telecommunication sector was carried out, using a hierarchical regression. In doing so, three different types of technologies that may be associated with e‐business (i.e. internet‐based applications, groupware applications, and collective systems) were considered.

The main findings are that any improvement in CP is significantly influenced by groupware applications and collective systems. Therefore, the UK SMEs and other large companies might be over‐investing in the development of web sites to support their internet presence, while under‐investing in promoting awareness and the use of these services to customers (i.e. groupware applications and collective systems).

Measuring the payoff is more difficult in e‐business environments because applications cut across boundaries thereby affecting multiple parties. Hence, alternative metrics to measure payoff from multiple perspectives could be necessary. Productivity measurements were conducted in the SME UK telecommunications sector, and hence findings are valid within this specific context.

The results of this paper provide interesting insights on the performance drivers of companies using e‐business technologies. The findings can guide managers in focusing their energies on e‐business technologies and represent an approach to determine which e‐business technologies are more likely to lead to a boost in productivity.

Many economists and politicians have declared the price mechanism to be the most effective coordination mechanism. On the contrary, the economic perspectives at the beginning of the twenty‐first century reveal that an increase in the supply of products does not necessarily engender an increasing demand. That is why more and more economists agree that every society not only can, but also must, choose the combination of coordination mechanisms that are most appropriate under its specific conditions.

Economic development and growth are approached as being dependent on the development of society and vice versa. The empirical relation between economic openness of a country and the structure of its industrial relations is analysed in relation to different economic outcomes. Special attention is paid to the question whether a policy to engender smaller income differentials does or does not provide a positive drive for the structural change towards a modern information technology‐based economy.

Although some authors argue that smaller income differentials coincide with lower productivity rates, this study reveals that there is no such trade‐off. Different sets of coordinating mechanisms determine economic performance. The market mechanism is therefore not the overriding force determining economic development. On the contrary, income and education seem to be two drivers of the sectoral shift to an ICT‐based service economy.

Different sets of coordination mechanisms seem to support the same economic performance. This implies that governments should once again take responsibility for structuring the economy and society – that is to enforce a system of reliable justice for the vast majority of citizens.