New Study Reveals Impact of Information Technology on Productivity Levels
The article discusses how to estimate production functions for firms that make multiple products with different technologies. The researchers developed a method to account for hidden inputs and correct common estimation problems. They found that assuming a single technology for all products can lead to significant biases in productivity estimates. Additionally, they discovered that the effects of information technology investments on productivity can vary from negative to positive, with many firms experiencing initial disruptions before seeing benefits.