Indian Journal of Innovations and Developments

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In this paper, we will study around the impact of IT 'information technology' on increase labor productivity in small manufacturing firms in Semnan province in Iran over the 2001-2007. A few models were run by using pooling data technique covering manufacturing units at two digit level of ISIC classification. In this study, first we estimate the growth rate of TFP by Slow method. The results indicated that all of the factors, the growth rate of IT-capital, Non-IT-capital, human capital, TFP, have positive and meaningful effect on the growth rate of labor productivity in small manufacturing firms in Semnan. The tow period-lagged growth rate of IT-capital has positive and meaningful, but not significant effect on the growth rate of labor productivity. Non-IT-capital effecting has more than IT-capital. The growth rate of TFP is most influential factor affecting labor productivity.

Keywords

Information Technology, Labor Productivity, IT-capital, Small Manufacturing Firms
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