TY - JOUR
T1 - Assessing output performance of information technology service industries
T2 - Productivity, innovation and catch-up
AU - Shao, Benjamin
AU - Lin, Winston T.
N1 - Funding Information:
The authors wish to thank two anonymous reviewers and the editor for their constructive comments and helpful suggestions. This study was supported by the ASU W. P. Carey School of Business Dean׳s Award for Excellence Summer Research Grant and by the SUNY at Buffalo when the first author gratefully spent part of his 2014 sabbatical leave visiting the school. Any errors that remain are the sole responsibility of the authors.
Publisher Copyright:
© 2015 Elsevier B.V. All rights reserved.
PY - 2016/2/1
Y1 - 2016/2/1
N2 - The purpose of this paper is to assess the output performance of information technology (IT) service industries of twelve Organization of Economic Cooperation and Development (OECD) countries over the years from 2000 to 2011. We use Malmquist productivity index (MPI) as the performance metric and stochastic production frontier (SPF) as the measurement approach. We then decompose MPI into two ingredient components that represent technological change for innovation capability and efficiency change for catch-up effort. It is found that the IT service industries display an impressive annual rate of 7.4% for productivity growth during the study period. The parametric decomposition of MPI unveils that almost all of the productivity growth observed is enabled by technological advance made to the production process by IT service providers while efficiency change has little effect. Moreover, each country×s IT service industry demonstrates a distinctive pattern relating to the three measures of productivity growth, technological change, and efficiency change. This observation suggests that each country×s IT service industry possesses certain strengths that become the sources of its competitive advantage, and there are weaknesses that could be targets for performance improvement. Based on our empirical results, we offer practical implications and identify future research topics for performance evaluation of IT service and other industries.
AB - The purpose of this paper is to assess the output performance of information technology (IT) service industries of twelve Organization of Economic Cooperation and Development (OECD) countries over the years from 2000 to 2011. We use Malmquist productivity index (MPI) as the performance metric and stochastic production frontier (SPF) as the measurement approach. We then decompose MPI into two ingredient components that represent technological change for innovation capability and efficiency change for catch-up effort. It is found that the IT service industries display an impressive annual rate of 7.4% for productivity growth during the study period. The parametric decomposition of MPI unveils that almost all of the productivity growth observed is enabled by technological advance made to the production process by IT service providers while efficiency change has little effect. Moreover, each country×s IT service industry demonstrates a distinctive pattern relating to the three measures of productivity growth, technological change, and efficiency change. This observation suggests that each country×s IT service industry possesses certain strengths that become the sources of its competitive advantage, and there are weaknesses that could be targets for performance improvement. Based on our empirical results, we offer practical implications and identify future research topics for performance evaluation of IT service and other industries.
KW - Catch-up
KW - Industry analysis
KW - Information technology service
KW - Innovation
KW - Malmquist productivity index
KW - Stochastic production frontier
UR - http://www.scopus.com/inward/record.url?scp=84950246123&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=84950246123&partnerID=8YFLogxK
U2 - 10.1016/j.ijpe.2015.10.026
DO - 10.1016/j.ijpe.2015.10.026
M3 - Article
AN - SCOPUS:84950246123
SN - 0925-5273
VL - 172
SP - 43
EP - 53
JO - International Journal of Production Economics
JF - International Journal of Production Economics
ER -