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.

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Nicholas Bloom, Raffaella Sadun and John Van Reenen

1 February 2012

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American Economic Review 102(1), pp.167-201, 2012

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DOI: 10.1257/aer.102.1.167

https://www.aeaweb.org/articles?id=10.1257/aer.102.1.167

This Journal article is published under the centre's Growth programme.

This publication comes under the following theme: Management practices and productivity, New technologies and productivity