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The Impact of Information Technology on Productive Efficiency: International Comparison

The Impact of Information Technology on Productive Efficiency: International Comparison
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Author(s): Winston T. Lin (The State University of New York at Buffalo, USA) and Paige P. Tsai (The State University of New York at Buffalo, USA)
Copyright: 2006
Pages: 2
Source title: Emerging Trends and Challenges in Information Technology Management
Source Editor(s): Mehdi Khosrow-Pour, D.B.A. (Information Resources Management Association, USA)
DOI: 10.4018/978-1-59904-019-6.ch296
ISBN13: 9781616921286
EISBN13: 9781466665361

Abstract

The economic measures of IT benefits in organizational performance frequently used include profitability, productivity, costs, quality, operative efficiency, consumer surplus, and Tobin’s q (cf. [22]). Quite a few research results were able to confirm the contribution of IT in organizations. However, some of them derived only weak or even inconclusive results. For example, the so-called productivity paradox of IT [3] has confused both managers and researchers during the 1980s [14] and is claimed to have disappeared in early 1990s. The productivity paradox of IT suggests that the huge amount of investments in IT has been found uncorrelated with significant organizational performance improvement in aggregate output productivity. Typical explanations to the productivity paradox include the following: (i) massive investment in IT started only from recent years [26]; (ii) because of the time-lagged effects of IT, it takes time to realize the benefit of IT [11]; (iii) output mismeasurement [5, 33]; (iv) input mismeasurement [8]; (v) overinvestment in IT [26]; and (vi) lack of organizational changes accompanying the IT investment [6].

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