Atasoy, H., Banker, R.D. and Pavlou, P.A., 2016. On the Longitudinal Effects of IT Use on Firm-Level Employment. Information Systems Research, 27(1), pp.6-26.

It is a critical question to understand how IT investment could affect the firm-level employment with argument that whether IT investment would replace human labor with automation or improve workers’ productivity, and the authors examine the longitudinal role of IT use in the firm’s total number of employees. The dataset covers firms with different sizes in various industries from Turkey and captures the firm-level applications of different enterprise software and systems such as ERP, CRM and web applications.

The empirical specifications exploit both within-firm and between-firm variations to show the positive effect of IT use on firm-level employment, which varies across IT applications over time. Interestingly, they find that the effects of the use of enterprise applications materialize after two years, whereas the effects of the use of Web applications are realized in the current year. The authors also explore the moderating role of different factors such as firm size, industry technology density, and average salary rate. They find that long-term effects of the use of enterprise applications on firm-level employment are more pronounced in larger firms, with higher average wages, and in high-technology industries.