Information Technology's Impact on Firm Structure: A Cross-Industry Analysis

The present analysis explores information technology's (IT) relationship to employment and firm structure by examining how IT affects the relative size of employment at auxiliary units. The analysis treats auxiliary units-establishments where employees provide support services (mainly administrative) to production establishments-as a proxy for the highest administrative levels of the organizational hierarchy. Statistical analyses of 46 industries show large variations across industries in the size, sign, and statistical significance of the elasticities of auxiliary unit employment shares with respect to IT capital stock shares. Nevertheless, our results, combined with other evidence, suggest that economies of scale-gained from using IT to reduce coordination and monitoring costs-influence firm size and structure.

Language

  • English

Media Info

  • Media Type: Web
  • Features: Appendices; Bibliography; Tables;
  • Pagination: 30p

Subject/Index Terms

Filing Info

  • Accession Number: 01103318
  • Record Type: Publication
  • Report/Paper Numbers: ESA/OPD 97-2
  • Files: NTL, TRIS
  • Created Date: Jun 10 2008 12:48PM