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The Contribution of Information Technology to Organizational Productivity: An Exploratory Study Using a Regression Tree

The Contribution of Information Technology to Organizational Productivity: An Exploratory Study Using a Regression Tree
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Author(s): Myung Ko (Virginia Commonwealth University, USA)and Kweku-Muata Bryson (Virginia Commonwealth University, USA)
Copyright: 2002
Pages: 3
Source title: Issues & Trends of Information Technology Management in Contemporary Organizations
Source Editor(s): Mehdi Khosrow-Pour, D.B.A. (Information Resources Management Association, USA)
DOI: 10.4018/978-1-930708-39-6.ch111
ISBN13: 9781930708396
EISBN13: 9781466641358

Abstract

As investments in information technology (IT) have continuously increased, identifying the contribution of IT investments has been a major issue of IS research. In this study, we explored the relationship of IT to organizational productivity using a regression tree (RT), a Data Mining technique. Based on a firm-level dataset, our results are consistent with the previous studies in that IT investments make a positive contribution to the firm’s productivity. However, our RT based analysis has revealed additional facts. While IS Labor contributes positively to the firm’s output, Computer Capital, which represents the market value of IT infrastructure, does not. In addition, contribution of IS Labor to organizational productivity is not uniform. When Labor is within a certain range, IS Labor contributes to the firm’s output. Otherwise, the contribution of IS Labor is insignificant. In addition, none of IT contributes in generating the highest value of firm’s productivity. This indicates that IT “Productivity Paradox” still exists.

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