The impact of ICT on productivity of Italian firms: evaluation of the micro-complementarity hypothesis

Abstract

The seminal work of Milgrom and Roberts (1990) established that interactions between factors such as Information and Communication Technologies (ICTs), organization and human capital entail a complementary relationship between these inputs; from such interactions, firms are able to exploit productivity gains arising from ICT investment. The empirical analysis is conducted on a panel of Italian manufacturing firms covering the period 2001–2006. The application of a suited System Generalized Method of Moments (SYS-GMM) estimator shows that for firms engaging ICT there exists a more coherent relationship between pair inputs and also among all three inputs considered.

Keywords:

• Information Technology
• organizational change
• training
• firm productivity
• complementarities

JEL Classification:

• L600
• D220
• O330

Notes

¹ Data available upon request.

² We eliminate all observations with missing value in inputs involved in the complementary relationship at time t − 2.