| Abstract: | Firms all over the world make significant investments in information and
communication technologies (ICT) aiming to increase their efficiency and effectiveness. It
is of critical importance to investigate the impact of these investments on firms’
performance in various contexts, and also identify ‘soft factors’ that can increase this
impact. This paper presents the results of an empirical investigation of the effect of ICT
investments on Greek firms’ business performance, measured through value added and
labor productivity. It also examines for first time in Greece whether and to what extent this
effect can be increased if ICT investments are aligned with business strategy. The study is
based on a unique research dataset, including data from 237 Greek firms about business
performance, usage of ICT, adoption of modern organization forms and innovation, which
has been collected through a questionnaire-based survey among Greek firms conducted in
cooperation with ICAP, one of the largest business information and consulting companies
of Greece. Using these data econometric models of output and labor productivity have been
estimated based on the Cobb-Douglas production function. It has been concluded that ICT
investments in Greece make a positive and statistically significant contribution to both firm
output and labor productivity, so there is no ‘ICT Productivity Paradox’ in Greece.
Additionally, it has been found that this contribution can be increased considerably, in the
firms for which a very high degree of bilateral relationship between the ICT Plan and the
Overall Business/Strategy Plan exists. |
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Greek