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Topic: Business
Number of pages / Number of words: 4 / 899
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For example, productivity studies consistently find that the output elasticities of computers exceed their (measured) input shares. One explanation for this finding is that the output elasticities for IT are about right, but the productivity studies are underestimating the input quantities because they neglect the role of unmeasured complementary investments...


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Dividing the output of the whole set of complements by only the factor share of IT will imply disproportionately high rates of return for IT.

A variety of other evidence suggests that hidden assets play an important role in the relationship between IT and productivity. Brynjolfsson and Hitt (1995) estimated a firm fixed effects productivity model...


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