ICT, R&D, and Organizational Innovation: Exploring Complementarities in Investment and Production

Pierre Mohnen, Michael Polder, George van Leeuwen

Chapter in NBER book Measuring and Accounting for Innovation in the Twenty-First Century (2021), Carol Corrado, Jonathan Haskel, Javier Miranda, and Daniel Sichel, organizers
Conference held March 10–11, 2017
Published in April 2021 by University of Chicago Press
© 2021 by the National Bureau of Economic Research
in NBER Book Series Studies in Income and Wealth

This paper examines whether there are complementarities between investments in ICT, R&D and organizational innovation, and the contributions of different investment profiles to total factor productivity growth on Dutch firm-level data. We estimate an integrated model of investment profile adoption and total factor productivity growth. We find that the three investment decisions are complementary, in the sense that investing in one increases the probability of investing in another, because joint investments lead to higher TFP growth than individual investments. ICT earns on average an average rate of return of 9.7%, followed by 6% to 7% on organizational innovation and a modest 1.4% to 1.8% on R&D in services and manufacturing respectively.

Acknowledgments

Machine-readable bibliographic record - MARC, RIS, BibTeX