Americans Do IT Better: US Multinationals and the Productivity Miracle

US productivity growth accelerated after 1995 (unlike Europe's), particularly in sectors that intensively use information technologies (IT). Using two new micro panel datasets we show that US multinationals operating in Europe also experienced a "productivity miracle." US multinationa...

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Bibliographic Details
Published in:The American economic review 2012-02, Vol.102 (1), p.167-201
Main Authors: Bloom, Nicholas, Sadun, Raffaella, Van Reenen, John
Format: Article
Language:English
Subjects:
Capital per worker
Capital stock
Coefficients
Comparative analysis
Datasets
Economic growth
Economic theory
Enterprises
Europe
Experimental/theoretical
GDP
Gross Domestic Product
Hypotheses
Industrial productivity
Information technology
International business
Labor productivity
Multinational corporations
Multinational enterprises
Panel data
Production capital
Production estimates
Production functions
Productivity
Productivity growth
Productivity measurement
Studies
U.S.A
Western Europe
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Summary:US productivity growth accelerated after 1995 (unlike Europe's), particularly in sectors that intensively use information technologies (IT). Using two new micro panel datasets we show that US multinationals operating in Europe also experienced a "productivity miracle." US multinationals obtained higher productivity from IT than non-US multinationals, particularly in the same sectors responsible for the US productivity acceleration. Furthermore, establishments taken over by US multinationals (but not by non-US multinationals) increased the productivity of their IT. Combining pan-European firm-level IT data with our management practices survey, we find that the US IT related productivity advantage is primarily due to its tougher "people management" practices.
ISSN:0002-8282
1944-7981
DOI:10.1257/aer.102.1.167