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Information Technology, Decentralization, Human Capital and Firm Performance: Firm-level Analysis

  • Informatization Policy
  • Abbr : 정보화정책
  • 2006, 13(2), pp.50-66
  • Publisher : NIA
  • Research Area : Social Science > Public Policy

ILSOON SHIN 1

1인하대학교

Accredited

ABSTRACT

The Korean Economy has experienced two rather unique phenomena since late 1990’s. First, the domestic enterprises have increased the IT investment continuously, and secondly, they have expedited the so-called rapid‘ restructuring’following the IMF financial crisis. This paper analyzes the elationship and the effect on the firm’s performance of these two seemingly unrelated phenomena. For this purpose, the empirical analysis of augmented production function is carried out using firm-level data. The main findings are as follows. First, the productivity of firms that provide higher occupational training is shown to be 6.5%p greater than the firm providing average level training. Second, the productivity of firms with more decentralized authorities is shown to be 8%p greater than the average firms. Third, although the magnitude is small. there exists the complementary relationship between the IT investment and the organizational change, which enhances the firm-level productivity.

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