The business value of information technology and productivity paradox at Chinese national level

Zhang Zhiguang; Cai Jianfeng

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Science Research Management ›› 2013 ›› Issue (7) : 154-160.

The business value of information technology and productivity paradox at Chinese national level

Zhang Zhiguang, Cai Jianfeng

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Abstract

Based on the production theory, as influential factors of productivity, the national characteristics are introducing into traditional model of stochastic production frontier and based on Cobb-Douglas production function, the two-equation stochastic production frontier model is constructed to investigate the contribution of Information Technology (IT) capital toward economic growth and production efficiency during the period of 1996 to 2007 in China. The main conclusions are as follows: the IT capital has a positive impact on economic growth and production efficiency, the productivity paradox is not a phenomenon of globalization is verified at the national level; the IT capital weakens the contributions of physical capital toward economic growth, and strengthens the contributions of human capital toward economic growth; the national characteristics improve production efficiency, however do not realize the value of IT investment; the phenomenon of returns to scale decrease occurs in china. Based on the results of empirical examination, some suggestions for promoting IT investment value in China are proposed.

Key words

information technology value / productivity paradox / stochastic production frontier / Cobb-Douglas production function / developing country

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Zhang Zhiguang, Cai Jianfeng. The business value of information technology and productivity paradox at Chinese national level[J]. Science Research Management. 2013(7): 154-160

References

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