Abstract:

US productivity growth accelerated after 1995 ( unlike Europe's ), particularly in sectors that intensively use information technologies (IT). Using two new micro panel dataseis we show that US multina- tionals operating in Europe also experienced a "productivity mira- cle " US multinationals obtained higher productivity from IT than non-US multinationals, particularly in the same sectors responsible for the US productivity acceleration. Furthermore , establishments taken over by US multinationals ( but not by non-US multination- als) increased the productivity of their IT. Combining pan-European firm-level IT data with our management practices survey , we find that the US IT related productivity advantage is primarily due to its tougher " people management " practices.