![]() firms, for the period 1988 to 1992, previously analyzed by Brynjolfsson and Hitt (, ) and Lichtenberg (Lichtenberg, F. Our primary source of IT-related data is the IDG/ Computerworld annual survey data on IS spending by large U.S. ![]() 3 183–199.) and extends it to jointly estimate output and substitution elasticities using the CES-translog production function. Information technology as a factor of production the role of differences among firms. This paper builds on the empirical framework of Brynjolfsson and Hitt (Brynjolfsson, E., L. The ability to take advantage of improvements in IT is determined in part by the substitutability of IT for other factors of production. ![]() private sector, and the ratio of new IT investments to labor costs is approaching 5% (1990 dollar basis). By 1994, IT accounts for over 15% of fixed investments by the U.S. ![]() Fueled by its constant technological and price improvements, information technology (IT) is displacing other inputs in the production of goods and services. ![]()
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