Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/207726 
Year of Publication: 
2018
Series/Report no.: 
NBB Working Paper No. 346
Publisher: 
National Bank of Belgium, Brussels
Abstract: 
Using a novel comprehensive data set of IT investment at the firm level, we find that a firm investing an additional euro in IT increases value added by 1 euro and 38 cents on average. This marginal product of IT investment increases with firm size and varies across sectors. IT explains about 10% of productivity dispersion across firms. While we find substantial returns of IT at the firm level, such returns are much lower at the aggregate level. This is due to underinvestment in IT (IT capital deepening is low) and misallocation of IT investments.
JEL: 
D24
L10
O14
O49
Document Type: 
Working Paper

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