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Empirical Analysis for Korean Manufacturing Firm's IT Investment Effect to Economic Performance  

Ko Joong-Gul (KT마케팅연구소 마케팅전략연구팀)
Han Hyun-Soo (한양대학교 정보통신대학 정보기술경영)
Publication Information
Journal of the Korean Operations Research and Management Science Society / v.30, no.4, 2005 , pp. 15-25 More about this Journal
Abstract
As implied by the terms of IT productivity Paradox, measuring the Information technology contribution to economic performance has been one of the challenging issues to both policy makers and business professionals. As such, diverse attempts with sophisticate analyses have been reported in the literature to analyze the effect of IT contributions. In this paper, we follow Growth Accounting Method to measure the IT contribution effect to manufacturing firm's economic performance in Korea. Various regression methods and statistical analyses are applied with fourteen years of industry Panel data. Using the Cobb-Douglas function, time lag analysis is made to understand IT effect to economic growth. Instead of capturing data from individual firm, industry level data from the National Statistics Bureau is used for IT capital, non-IT capital, and so on. Statistical analysis following the panel unit test and Panel co-integration test was performed to reveal the exact effect of IT contribution to economic performance. Empirical testing results for non-stationary nature of IT investment effect are reported as well as IT contribution to manufacturing industry's economic performance.
Keywords
IT Productivity Paradox; Growth Accounting Method; Manufacturing Industry;
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