Using U.S. firm-level data from 1971 to 2000, this paper quantifies the importance of production input reallocation in explaining the information technology (IT) driven productivity growth. We find that cross-industry variation in input reallocation explains more than 30% of differences in the...

Firm-specific variation in stock returns and fundamental performance measures is significantly higher in industries that have a history of more investment in information technology (IT). We hypothesise that IT is associated with creative destruction or product differentiation, either of which...