Research NoteDoes Technological Progress Alter the Nature of Information Technology as a Production Input? New Evidence and New Results

Paul Chwelos, Ronald Ramirez, Kenneth L Kraemer, Nigel P Melville
Information Systems Research,Vol. 21, Issue 2, Pages: 392-408.

Prior research at the firm level finds information technology (IT) to be a net substitute for both labor and non-IT capital inputs. However, it is unclear whether these results hold, given recent IT innovations and continued price declines. In this study we extend prior research to examine whether these input relationships have evolved over time. First, we introduce new price indexes to account for varying technological progress across different types of IT hardware. Second, we use the rental price methodology to measure capital in terms of the …
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