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Impact of Information Technology investments on firm productivity in peripherals countries: The case of Portugal

The International Journal of Latest Trends in Finance and Economic Sciences

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Field Value
 
Title Impact of Information Technology investments on firm productivity in peripherals countries: The case of Portugal
 
Creator Guerreiro, António; University of Évora, Department of Management & CEFAGE-UE
Guerreiro, Gertrudes Saúde; University of Évora, Department of Economics & CEFAGE-UE
 
Subject Managment; Information Systems
Information Technology investments; Firm Productivity; Return on Equity
 
Description IS/IT investments are seen has having an enormous potential impact on the competitive position of the firm, on its performance, and demand an active and motivated participation of several stakeholder groups. The shortfall of evidence concerning the productivity of IT became known as the ‘productivity paradox’. As Robert Solow, the Nobel laureate economist stated “we see computers everywhere except in the productivity statistics”. An important stream of research conducted all over the world has tried to understand these phenomena, called in the literature as «IS business value» field. However there is a gap in the literature, addressing the Portuguese situation. No empirical work has been done to date in order to understand the impact of Information Technology adoption on the productivity of those firms. Using data from two surveys conducted by the Portuguese National Institute of Statistics (INE), Inquiry to the use of IT by Portuguese companies (IUTIC) and the Inquiry Harmonized to (Portuguese) companies (accounting data), this study relates (using regression analysis) the amounts spent on IT with the financial performance indicator Returns on Equity, as a proxy of firm productivity, of Portuguese companies with more than 250 employees. The aim of this paper is to shed light on the Portuguese situation concerning the impact of IS/IT on the productivity of Portuguese top companies. Empirically, we test the impact of IT expenditure on firm productivity of a sample of Portuguese large companies. Our results, based on firm-level data on Information Technology expenditure and firm productivity as measured by return on equity (1186 observations) for the years of 2003 and 2004, exhibit a negative impact of IT expenditure on firm productivity, in line with “productivity paradox” claimants.
 
Publisher International Journal of Latest Trends in Finance and Economic Sciences
 
Contributor —
 
Date 2016-07-21
 
Type —
 
Format application/pdf
 
Identifier http://ojs.excelingtech.co.uk/index.php/IJLTFES/article/view/1276
10.2047/ijltfesvol6iss2-1108-1114
 
Source International Journal of Latest Trends in Finance and Economic Sciences; Vol 6, No 2 (2016): June; 1108-1114
 
Language en
 
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