ICT, skills, and organizational change: evidence from Italian manufacturing firms

Abstract

This paper explores how firms’ skills and organizati onal change affect the returns from investments in ICT. Our work contributes to the literature by testing the h ypothesis of complementarity in a panel of 540 Ital ian manufacturing firms during 1995-2000. By drawing on different statistical methods, we do not find any clearcut support to the hypothesis of full complementarity a mong ICT, human capital and organizational change. We find a strong support to the hypotheses of skill-biased te chnical change and a weaker support to the skill-bi ased organizational change hypothesis particularly in me dium-sized firms. Our findings suggest that the pro ductivity gains from investments in the three innovative activities are related to firm size.