Sustaining IT advantage: the role of structural differences
MIS Quarterly - Special issue on the strategic use of information systems
Added value and pricing with information technology
MIS Quarterly
Technology investment and business performance
Communications of the ACM
Information technology impact on process output and quality
Management Science - Special issue: Frontier research on information systems and economics
The substitution of information technology for other factors of production: a Firm Level Analysis
Management Science - Special issue: Frontier research on information systems and economics
Information Technology Effects on Firm Performance As Measured by Tobin's Q
Management Science
Information Systems Research
The Impact of E-Commerce Announcements on the Market Value of Firms
Information Systems Research
Information Technology and Productivity: Evidence from Country-Level Data
Management Science
Industry Level Supplier-Driven IT Spillovers
Management Science
Information technology and productivity: Empirical evidence from the Chinese electronics industry
Information and Management
Research Note---Returns to Information Technology Outsourcing
Information Systems Research
Journal of Management Information Systems
Information Technology and Trademarks: Implications for Product Variety
Management Science
The Effects of Investments in Information Technology on Firm Performance: An Investor Perspective
Journal of Information Technology Research
Investments in information systems: A contribution towards sustainability
Information Systems Frontiers
Using information systems to improve energy efficiency: Do smart meters make a difference?
Information Systems Frontiers
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Many studies measure the value of information technology (IT) by focusing on how much value is added rather than on the mechanisms that drive value addition. We argue that value from IT arises not only directly through changes in the factor input mix but also indirectly through IT-enabled augmentation of non-IT inputs and changes in the underlying production technology. We develop an augmented form of the Cobb-Douglas production function to separate and measure different productivity-enhancing effects of IT. Using industry-level data from the manufacturing sector, we find evidence that both direct and indirect effects of IT are significant. Partitioning industries into IT-intensive and non-IT-intensive, we find that the indirect effects of IT predominate in the IT-intensive sector. In contrast, the direct effects of IT predominate in the non-IT intensive sector. These results indicate structural differences in the role of IT in production between industries that are IT-intensive and those that are not. The implication for decision-makers is that for IT-intensive industries the gains from IT come primarily through indirect effects such as the augmentation of non-IT capital and labor.