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To: Alomex who wrote (129547)8/4/2001 1:17:36 PM
From: GST  Read Replies (1) of 164684
 
Alomex: The issue for me is not the amount of money spent on computers -- it is the effectiveness of this spending. I believe that some companies use technology in a way that yields tremendous performance improvement in terms of cost and service -- but on the other hand there are investments in computers that yield nothing or negative returns. Buying and installing computers per se does not mean anything to me -- it just means that money was spent, and it is as likely to be spent unwisely as it is to be spent wisely. If your line of reasoning is that information technology CAN be used to make things far better, then I agree. If your reasoning is that this is mostly the case, I find it hard to see the evidence of this. As for SB's point, if chain weighted measures are indeed intended to fudge the results to make it look like computers are effectively used, even if there is no hard data, then i think he has a point. It is not helpful to "adjust" the data to suit your bias.

<<<<Brynjolfsson and Hitt (1996) analyzed the impact of IT on marginal output using a new firm-level database and found large contributions of IT to marginal product for the firms in their study. Every additional dollar of computer capital stock was associated with an increase in marginal output of 81 cents, and every additional dollar spent on IT-related labor was associated with an increase in marginal output of $2.62. Their earlier work also demonstrates that firm-level factors account for half of the variability in IT's marginal product contributions (Brynjolfsson and Hitt 1995). In contrast, previous studies indicate that increases in IT are not associated with increases in marginal output; Morrison and Berndt (1990) found a negative relationship between IT spending and marginal output.

The significance of IT emerges in areas of business impact other than conventionally measured productivity gains. Three types of effects are worth particular note: the expansion of banking products and services, time and cost savings, and competitive positioning>>>>
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