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Vol. 55, No. 4, pp. 299-312 (2004)

“The Economic Impact of IT and Its Paradox in Japan”
Tsutomu Harada (Graduate School of Business Administration, Kobe University)

The purpose of this paper is to empirically examine the economic impact of IT in Japan, utilizing firm level panel data. In this study, it was found that the economic effects of IT investment can not be identified with full confidence. While the marginal productivity of IT labor remains negative, its productivity growth has a positive impact on labor productivity growth. This paper discusses several implications of these findings.