The Productivity Impact of E-commerce in the Uk, 2001: Evidence from Microdata

This paper considers the impact of e-commerce on establishment level productivity for all sectors of the economy, using data from the UK E-commerce survey. ECommerce represents the operational application of technology in the production process and may be regarded as an innovation driven change in workplace practice. Using a production function approach to measuring productivity, we find that OLS estimation fails to adequately account for the selectivity bias amongst enterprises that use e-commerce. Using a treatment effect estimator, we find that both e-buying and eselling have significant and positive impacts on productivity. ∗ The authors gratefully acknowledge the ONS for granting access to the E-commerce and ABI surveys. We also wish to thank Mary O'Mahony, Tony Clayton, Jonathan Haskel, Chiara Criscuolo, Thomas Zwick and Ian Marsh for comments. This work has been funded under the European Commission fifth framework project, ‘Employment prospects in the knowledge economy’. This work contains statistical data from ONS which is Crown copyright and reproduced with the permission of the controller of HMSO and Queen's Printer for Scotland. The use of the ONS statistical data in this work does not imply the endorsement of the ONS in relation to the interpretation or analysis of the statistical data. ** Corresponding author: [email protected]