High-tech capital formation and economic performance in U.S. manufacturing industries An exploratory analysis

To what extent have investments in ‘high-tech’ office and information technology capital ‘delivered’ in terms of reducing costs and facilitating productivity growth? In this paper we explore relationships between industry performance measures and investments in high-tech office and information technology capital for two-digit manufacturing industries from 1968 through 1986. We find limited evidence of a positive relationship between profitability and the share of high-tech capital in the total physical capital stock (OFK). However, we find that increases in OFK are negatively correlated with multi-factor productivity and tend to be labor-using. We also find some evidence that industries with a higher proportion of high-tech capital have higher measures of economic performance, although within industries increasing OFK does not appear to improve economic performance.