Investments in Information Technology: Indirect Effects and Information Technology Intensity

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dc.contributor.authorNault, Barrie R
dc.contributor.authorMittal, Neeraj
dc.date.accessioned2015-05-25T21:38:09Z
dc.date.available2015-05-25T21:38:09Z
dc.date.issued2009-03
dc.description*INFORMS: unless published under the open access option, the publisher will provide a specific copy of the paper that can be posted to a web page https://www.informs.org/Find-Research-Publications/INFORMS-Journals/Rights-Permissions#work. Article depositied according to publisher's policy 05/25/2015en_US
dc.description.abstractMany studies measure the value of information technology (IT) by focusing on how much value is added rather than on the mechanisms that drive value addition. We argue that value from IT arises not only directly through changes in the factor input mix but also indirectly through IT-enabled augmentation of non-IT inputs and changes in the underlying production technology. We develop an augmented form of the Cobb-Douglas production function to separate and measure different productivity-enhancing effects of IT. Using industry-level data from the manufacturing sector, we find evidence that both direct and indirect effects of IT are significant. Partitioning industries into IT-intensive and non-IT-intensive, we find that the indirect effects of IT predominate in the IT-intensive sector. In contrast, the direct effects of IT predominate in the non-IT intensive sector. These results indicate structural differences in the role of IT in production between industries that are IT-intensive and those that are not. The implication for decision-makers is that for IT-intensive industries the gains from IT come primarily through indirect effects such as the augmentation of non-IT capital and labor.en_US
dc.identifier.citationMittal, N., and Nault, B.R., "Investments in Information Technology: Indirect Effects and Information Technology Intensity, " Information Systems Research, 20,1 (March 2009), 140-154.en_US
dc.identifier.doihttp://dx.doi.org/10.11575/PRISM/28744
dc.identifier.issn1047-7047
dc.identifier.urihttp://hdl.handle.net/1880/50436
dc.language.isoenen_US
dc.publisherInformsen_US
dc.publisher.corporateUniversity of Calgaryen_US
dc.publisher.facultyHaskayne School of Businessen_US
dc.subjectIT productivityen_US
dc.subjectIndirect effectsen_US
dc.subjectIT investmenten_US
dc.subjectOutput elasticityen_US
dc.subjectTechnological changeen_US
dc.subjectProduction theoryen_US
dc.titleInvestments in Information Technology: Indirect Effects and Information Technology Intensityen_US
dc.typejournal article
thesis.degree.disciplineManagement Information Systemsen_US
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