ICT Externalities: Evidence from cross country data

This paper reports the findings of an empirical study on the external effects of Information and Communication Technologies (ICT) on economic growth and productivity at an aggregate level. It focuses on possible network effects and spillovers emerging as externalities from investments in ICT. The existence of externalities is well described in theoretical work however empirical evidence is scarce. By using time series at the macro level for a panel of 15 countries I find positive externalities for investments in IT software and in telecommunication equipment, but not for IT hardware. The analysis, which accounts for cyclical effects and also takes external effects from non-ICT factors into account, points at considerable lags between the time of investing in these technologies and the time at which the externalities arise. Taking these externality effects into account, the paper shows that the impact of ICT on productivity is almost twice as high as compared to a model that does not include such effects.Productivity, Network Effects, Spillovers, Information and Communication Technologies, Total Factor Productivity

Learning: What and How? An Empirical Study of Adjustments in Workplace Organization Structure

In this paper we seek to understand how firms learn about what adjustments they need to make in their organization structure at the workplace level. We define four organizational systems: traditional (the simplest system), high-performance (the most complex system), decision-making oriented, and financial-incentives oriented (intermediate complexity). We analyze (1) the effects of learning-by-doing on adoption of more or less complex systems, (2) the shape of the performance-experience learning curves associated with different systems, (3) the match between perceived organizational capabilities and the choice of systems, (4) the influence of other firms‘ systems and performance on a firm‘s adjustment decisions, and (5) the effect of a firm‘s location on its decisions. JEL classification: D83, L25, M54Learning-by-doing, Matching, Social learning, Vicarious Learning, Organizational Adjustments, Human Resources

The Adoption and Diffusion of Organizational Innovation: Evidence for the U.S. Economy

Using a unique longitudinal representative survey of both manufacturing and non-manufacturing businesses in the United States during the 1990's, I examine the incidence and intensity of organizational innovation and the factors associated with investments in organizational innovation. Past profits tend to be positively associated with organizational innovation. Employers with a more external focus and broader networks to learn about best practices (as proxied by exports, benchmarking, and being part of a multi-establishment firm) are more likely to invest in organizational innovation. Investments in human capital, information technology, R&D, and physical capital appear to be complementary with investments in organizational innovation. In addition, non-unionized manufacturing plants are more likely to have invested more broadly and intensely in organizational innovation.

Information technology, capabilities and Asset Ownership: Evidence from Taxicab Fleets

We examine how information technology (IT) influences asset ownership through its impact on firms’ and agents’ capabilities. In particular, we propose that when IT is a substitute for agents’ industry-specific human capital, IT adoption leads to increased vertical integration. We test this prediction using micro data on vehicle ownership patterns from the Economic Census during a period when computerized dispatching systems were first adopted by taxicab firms. The empirical tests exploit exogenous variation in local market conditions, to identify the impact of dispatching technology on firm asset ownership. The results show that firms increase the proportion of taxicabs owned by 12% when they adopt new computerized dispatching systems. The findings suggest that firms increasingly vertically integrate when they acquire resources that substitute for their agents’ capabilities.

The Effect of Adjustment Costs and Organizational Change on Productivity in Canada: Evidence from Aggregate Data

A basic neoclassical model of production is often used to assess the contribution of investment to output growth. In the model, investment raises the capital stock and output growth increases in proportion to the growth in capital. It has been argued, however, that computers, as a "general purpose technology," lead to process innovations and facilitate organizational coinvestments. Since there may be a learning period before firms realize the full potential of the new technology and begin to implement new processes, there may be a lag between the growth in investment and its benefits. In fact, during periods of rapid adoption of new technologies and equipment, firms may incur adjustment costs and struggle to maintain previous levels of output. Using aggregate annual Canadian data from 1961 to 2001, the author explores the magnitude of the effect that investment in new technology, in the form of new computer hardware, can have on output growth. He finds that such investment has a positive effect on output growth that cannot be explained by growth in inputs. This effect, however, is not instantaneous and is strongest only three years after the initial investment. Furthermore, the author's findings suggest that the effect of computer hardware investment has grown over time.Productivity

Uneven geographies of organizational practice: explaining the cross-national transfer and adoption of ISO 9000

There is growing recognition that organizational innovations can have a major influence on the geography of economic activity. Yet, very little is known about the mechanisms and geographic preconditions underlying their diffusion, particularly at the global level. In this paper we seek to fill this gap using the example of ISO 9000, the internationally- recognized set of standards for quality management. We develop a series of hypotheses about the conditions under which organizations are most likely to adopt ISO 9000. These hypotheses are then tested using panel data for 130 countries over the period 1995-2001. Our findings support the idea that transnational network ties linking countries to the wider global community influence adoption decisions. Thus, exports to the EU and Japan, local involvement of transnational corporations (TNCs), colonial ties to Europe and the availability of telecommunications, all emerge as statistically significant determinants of ISO 9000 counts. Our results also underscore the importance of national environmental conditions. Low regulatory burden, a high share of manufacturing activity, high rates of secondary school enrolment and low levels of productivity are positively associated with a high number of certificates. We conclude that globalization has increased the mobility of organizational innovations across national borders. Yet, country- level variations in (a) transnational network linkages and (b) environmental conditions influencing the receptiveness of organizations to new economic practices, suggest that spatial unevenness is an inevitable feature of organizational diffusion at the global level.ISO 9000, standards, cross-national diffusion, globalization, institutionalism

The Role of Management Practices in Closing the Productivity Gap

There is no doubt that management practices are linked to the productivity and performance of a company. However, research findings are mixed. This paper provides a multi-disciplinary review of the current evidence of such a relationship and offers suggestions for further exploration. We provide an extensive review of the literature in terms of research findings from studies that have been trying to measure and understand the impact that individual management practices and clusters of management practices have on productivity at different levels of analysis. We focus our review on Operations Management (om) and Human Resource Management (hrm) practices as well as joint applications of these practices. In conclusion, we can say that taken as a whole, the research findings are equivocal. Some studies have found a positive relationship between the adoption of management practices and productivity, some negative and some no association whatsoever. We believe that the lack of universal consensus on the effect of the adoption of complementary management practices might be driven either by measurement issues or by the level of analysis. Consequently, there is a need for further research. In particular, for a multi-level approach from the lowest possible level of aggregation up to the firm-level of analysis in order to assess the impact of management practices upon the productivity of firms

Internal and external R&D: complements or substitutes? Evidence from a dynamic panel data model.

We examine the impact of internal and external R&D on labor productivity in a 6-year panel of 304 innovating firms. We apply a dynamic linear panel data model that allows for decreasing returns to scale in internal and external R&D with a non-linear approximation of changes in the knowledge stock. We find complementarity between internal and external R&D, with a positive impact of external R&D only evident in case of sufficient internal R&D. The findings confirm the role of internal R&D in enhancing absorptive capacity and hence the effective utilization of external knowledge. These results suggest that empirical studies examining complementarities between continuously measured practices should adopt more general non-linear specifications to allow for correct inferences.R&D; Panel data; Innovating firms; Knowledge; Empirical study; Specifications;