The Impact of Information Technology on Total Factor Productivity | Chapter 10 | Emerging Issues and Development in Economics and Trade Vol. 2

This paper employs the manufacturing firm-level data of Taiwan to explore the issue of whether information technology investment brings about the Solow productivity paradox. In order to consider the improvement of product quality caused by information technology investment, a hedonic price index is used to deflate the information technology variable. Besides the general specification of Cobb-Douglas production function, this paper considers the impact of information technology on total factor productivity, capital and labor productivity through substitution by applying a non-neutral production function.

Author(s) Details

Ting-Kun Liu
Department of Finance, Chaoyang University of Technology, 168, Jifeng E. Rd., Wufeng District, Taichung, 41349, Taiwan, R.O.C.

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