Productivity in Information Service Industries: a Panel Analysis of Japanese Firms
Futoshi Kurokawa
Kiyohiko G. Nishimura
We examine factors determining productivity of information-technology service activities at firm level, using most comprehensive data of information service industries in Japan. We focus on the degree of modularisation and resulting outsourcing and economies/diseconomies of scale in software development, and changes. We find that outsourcing has persistent negative effects on total factor productivity, suggesting not only productivity-enhancing modularisation is not fully utilised but also productivity-hindering remnants of traditional main-contractor-subcontractor relations still prevail in Japanese information service industries. We also find diseconomies of scale in software development, suggesting less efficient communication among development team members.
JEL Classification: L23, L25, L86, O33.Keywords :
information service industry, productivity, modularization and outsourcing, Japan, firm-level data.
• Introduction
• Factors Determining Productivity of Information-Service Firms
— Modularisation
— Scale of Development Organisation
• Data: Survey of Selected Service Industries: Volume of Information Service Industries
— Japanese Information Service Industries
— Characteristics of The Survey of Selected Service Industries
— “Firms with Well-Established Information Service Activities”
• Models, Estimation Results and Discussion
— Choice of Variables
— Models and Estimation
— Results and Discussion
• Concluding Remarks
• References