HP INNOVATION RESEARCH SEMINAR
Professor John Van Reenen, Centre for Economic Performance, LSE
Wednesday 27th September 2006
5.45pm - 7.30 pm
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5.45 pm
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Drinks and Registration
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6.00 pm
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Professor John Van Reenen, Director, Centre for Economic Performance, LSE
'Investigating the Productivity Miracle Using Multinationals'
Download Full Paper| (PDF)
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6.45 pm
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Comments from Mr Nick de la Bedoyere, Managing Director, Manufacturing, EDS
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7.00 pm
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Discussion and questions
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7.30 pm
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Drinks reception
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8.30 pm
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Close
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ABSTRACT
Productivity growth in sectors that intensively use information technologies (IT) appears to have accelerated much faster in the US than in Europe since 1995, leading to the US "productivity miracle". If this was partly due to the superior management/organization of US firms (rather than simply the US geographical or regulatory environment) we would expect to see a stronger association of productivity with IT for US multinationals located in Europe than for other firms. We examine a large panel of UK establishments and provide evidence that US owned establishments have a significantly higher productivity of IT capital than either non-US multinationals or domestic establishments. Indeed, the differential effect of IT appears to account for almost all the difference in total factor productivity between US-owned and all other establishments. This finding holds in the cross section, when including fixed effects and even when we examine a sample of establishments taken over by US multinationals. We find that the US multinational effect on IT is particularly strong in the sectors that intensively use information technologies (such as retail and wholesale): the very same industries that accounted for the US-European productivity growth differential since the mid 1990s.
The Seminar took place at LSE, Floor 5, Tower 3, Clements Inn, Strand,
London WC2A 2AZ