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Cited by 682

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Does Information Technology Lead to Smaller Firms?

Brynjolfsson, Erik, Malone, Thomas W., Gurbaxani, Vijay, Kambil, Ajit·1994·Management Science

Abstract

Many changes in the organization of work in the United States since 1975 have been attributed to the increased capabilities and use of information technology (IT) in business. However, few studies have attempted to empirically examine these relationships. The primary goal of this paper is to assess the hypothesis that investments in information technology are at least partially responsible for the important organizational change, the shift of economic activity to smaller firms. We examine this hypothesis using industry-level data on IT capital and four measures of firm size, including employees and sales per firm. We find broad evidence that investment in IT is significantly associated with subsequent decreases in the average size of firms. We also find that these decreases in firm size are most pronounced two to three years after the IT investment is made.

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Metadata

Authors
Brynjolfsson, E., Malone, T. W., Gurbaxani, V., & Kambil, A.
Venue
Management Science
Published
1994-12
Volume
40
Issue
12
Pages
1628-1644
ISSN
  • 0025-1909 (ISSN-L)
  • 1526-5501
OpenAlex
W2164304787
Cited by
682
References
2
FWCI
46.24
Type
journal article
Language
en
Open access
closed

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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).

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