ICT solutions and labor productivity: evidence from firm-level data

This paper analyses the impacts of information and communication technology (ICT) solutions on labor productivity, i.e. revenue per employee. Based on cross-sectional data on 1955 European firms in 2005 and a linear regression model derived from the microeconomic theory of production, the impacts of six common ICT solutions in electronic commerce (e-commerce) cannot be ignored. According to the linear regression analysis, Internet access, standardized data exchange with the trading partners, enterprise resource planning (ERP) system, and customer relationship management (CRM) system contribute significant increases in labor productivity, whereas a website on the Internet, or supply chain management (SCM) system do not result in a significant increase. Especially, Internet access has a significant effect on labor productivity, and the website on the Internet has an insignificant effect.