Direct and Indirect Impacts of Information Technology Applications on Productivity: A Field
Study
Tridas Mukhopadhyay and Vandana Mangal
International Journal of Electronic Commerce
Volume 1, Number 3, Spring 1997, pp. 85-100.
Abstract: Assessing the productivity impact of information technology (IT) applications is an
important research problem in electronic commerce and organizational computing in general. We
study the impact of a toll collection system introduced in thirty-eight interchanges of the
Pennsylvania Turnpike in 1987. We model labor productivity both before and after the new
system implementation. In addition to transaction volumes, we include productivity factors in our
models to account for differences in technology, labor, and traffic patterns across the turnpike.
Our results show that IT may have two types of impact. First, it can directly affect the time to
process a transaction. Second, it can indirectly affect the role of a productivity factor. For
example, we found that the unfavorable effect of employee turnover on labor productivity
diminished with the introduction of the new system because it reduced the learning time for
replacement workers.
Key Words and Phrases: business value of information technology, information
technology applications, information technology productivity.