Paradox lost? Firm-level evidence on the returns to information systems spending

Article Abstract:

A firm-level input-output analysis of information systems spending data from 367 companies with a gross output of $1.8 trillion dollars in 1991 was carried out to determine the validity of the 'productivity paradox.' The latter holds that corporate expenditure on information technology (IT) has not resulted in productivity improvements or firm output increases. The survey, which investigated several components of IT spending for the period 1987-1991, found an average 81% gross marginal product for computer capital. In addition, IT strategies also showed an impact on firms' earning power. The results, which contradict earlier studies, indicate that IT spending 'creates more value than' other types of capital budgets and suggest that the productivity paradox disappeared sometime during the period 1987-1991.

Case studies, Economic aspects, Information technology, Econometrics, Technological innovations, Industrial productivity, Productivity accounting, Input-output analysis

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Measuring production efficiency in a not-for-profit setting: an extension

Article Abstract:

A revised version of Hayes and Miller's (1990) translog budget model is shown to be inferior to nonparametric data envelopment analysis (DEA) in modeling budgetary control in a not-for-profit setting. Hayes and Miller's results indicated that a translog budget model is superior to one that involves line-item budgeting. However, DEA is shown to be more appropriate than the translog model in routine budgetary control, despite its extension to account for budgetary objectives and technical, allocative, scale and institutional inefficiencies. Nevertheless, not-for-profit settings may still require translog specifications for input-output estimates. Thus, contrary to Hayes and Miller's result, the line-item approach inherent in the translog method is essential in the development of any budgetary system.

Models, Evaluation, Finance, Data envelopment analysis, Nonprofit organizations, Program budgeting

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The effects of setting budget goals and task uncertainty on performance: a theoretical analysis

Article Abstract:

The effect of budget goals on task performance is examined. The effect of budget goals depends on the degree of task uncertainty. Budget goals have a stronger effect on task performance when task uncertainty is low than when task uncertainty is high.

Analysis, Performance standards, Job performance standards

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