This paper examines the impact of information technology (IT) on labor
productivity growth using industry-level data for five OECD countries (the
United States, Canada, Japan, France, and the United Kingdom), from 1970
to 1990. Empirical findings show that IT investment has a positive effect on
labor productivity growth, accounting for about 15 percent of this growth.
The benefit of IT investment was on average lower than its cost over the
1970-1990 period, which implies that new IT investment had not been
efficiently used in the early period of IT adoption. The benefit per dollar cost
was almost two times greater in the 1980s than in the 1970s, which is mainly
due to a rapid fall in IT prices