Working Paper: NBER ID: w25044
Authors: Pierre Mohnen; Michael Polder; George van Leeuwen
Abstract: This paper examines whether there are complementarities between investments in ICT, R&D and organizational innovation, and the effects of different investment profiles on total factor productivity growth on Dutch firm-level data. We estimate an integrated model of investment profile adoption and total factor productivity growth. We find that the three investment decisions are complementary, in the sense that investing in one increases the probability of investing in another one because joint investments lead to higher TFP growth than individual investments. ICT earns on average an expected rate of return of 9.7%, followed by 6% to 7% on organizational innovation and a modest 1.4% to 1.8% on R&D in services and manufacturing respectively.
Keywords: ICT; R&D; Organizational Innovation; Total Factor Productivity
JEL Codes: L25; O30; O33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Investments in ICT (L86) | Investments in R&D (O32) |
| Investments in R&D (O32) | Investments in ICT (L86) |
| Investments in ICT and R&D (O39) | Total Factor Productivity (TFP) growth (O49) |
| Investments in R&D (O32) | Investments in Organizational Innovation (O35) |
| Investments in Organizational Innovation (O35) | Investments in R&D (O32) |
| Investments in ICT (L86) | Productivity of R&D Investments (O39) |
| Investments in R&D (O32) | Productivity of ICT Investments (O49) |