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  • February 2012
  • Article
  • American Economic Review

Americans Do IT Better: US Multinationals and the Productivity Miracle

By: Nicholas Bloom, Raffaella Sadun and John Van Reenen
  • Format:Print
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Abstract

US productivity growth accelerated after 1995 (unlike Europe's), particularly in sectors that intensively use information technologies (IT). Using two new micro panel datasets we show that US multinationals operating in Europe also experienced a "productivity miracle." US multinationals obtained higher productivity from IT than non-US multinationals, particularly in the same sectors responsible for the US productivity acceleration. Furthermore, establishments taken over by US multinationals (but not by non-US multinationals) increased the productivity of their IT. Combining pan-European firm-level IT data with our management practices survey, we find that the US IT related productivity advantage is primarily due to its tougher "people management" practices.

Keywords

IT Productivity; American IT Productivity; Information Technology; Performance Productivity; Multinational Firms and Management; Management Practices and Processes; United States; Europe

Citation

Bloom, Nicholas, Raffaella Sadun, and John Van Reenen. "Americans Do IT Better: US Multinationals and the Productivity Miracle." American Economic Review 102, no. 1 (February 2012): 167–201. (Slides; Summary; The Economist; Financial Times; New York Times.)
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About The Author

Raffaella Sadun

Strategy
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More from the Authors
  • Management and Firm Dynamism By: Nicholas Bloom, Jonathan S. Hartley, Raffaella Sadun, Rachel Schuh and John Van Reenen
  • Training Within Firms By: Brayan Diaz, Andrea Neyra-Nazarrett, Julian Ramirez, Raffaella Sadun and Jorge Tamayo
  • The Cybernetic Teammate: A Field Experiment on Generative AI Reshaping Teamwork and Expertise By: Fabrizio Dell'Acqua, Charles Ayoubi, Hila Lifshitz, Raffaella Sadun, Ethan Mollick, Lilach Mollick, Yi Han, Jeff Goldman, Hari Nair, Stew Taub and Karim R. Lakhani
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