Productivity growth and information communication technology investments in the United States

This dissertation makes both theoretical and empirical argument that the official aggregate productivity measures produced by the Bureau of Economic Analysis and the Bureau of Labor Statistics in the United States underestimate productivity growth gains made by individual businesses that invested heavily in information communication technology (ICT) during the second half of the 1990s.; The first chapter outlines the current academic debate on attempting to identify specific factors that may be responsible for the surprising gains in productivity growth made by the U.S. economy particularly after 1995 and explains why many researchers believe that investments in ICT are considered to be a leading driving factor.; The second chapter explains why the gains in productivity growth during the second half of the 1990s were very much unexpected. The chapter examines the academic debate that prevailed during the 1970s and 1980s that focused on how the growth of the U.S. government and its regulations of economic activities may have contributed to the decline in productivity growth during this time period.; The third chapter outlines a theoretical argument that suggests aggregate productivity measures may be susceptible to measurement problems that are uniquely associated with decomposing aggregating economic performance data and builds a case for conducting firm-level studies to gain undistorted insight into the surprising gains in productivity growth in the United States during the second half of the 1990s.; The chapter four provides empirical evidence based on examining the annual reports of individual businesses in two selected manufacturing industries, which demonstrates that significant gains were made by individual businesses that invested heavily in ICT during the second half of 1990s. Moreover, the chapter also explains why this empirical evidence does not show up when agglomerated in the official aggregate productivity measures.; Finally, the chapter five proposes a summarizing argument that individual businesses that invested in ICT to develop private ICT networks within their business or among their associates to lower information costs, develop network density, intensify information capital and internalize network information externalities to help manage their internal business processes and activities may generate significant gains in productivity growth after some time since the positive network effects may take up to a few years to fully materialize. Therefore, the evidence of these potential gains in productivity growth from ICT investments may not only widely disperse in the economy but their effects may have significant residual effects on the economy for years to come.