Week 8_Kleis et al. (2012)_Vicky Xu

Information Technology and Intangible Output: The Impact of IT Investment on Innovation Productivity

Since the prior research focused on the contribution of IT to firm-level productivity and less research concern about the relationship between IT, knowledge creation, and innovation output, Kleis et al. (2012) try to identify the contribution of IT to innovate production across multiple contexts using a quality-based measure of innovation output.

Kleis et al. (2012) address the conceptual model of knowledge production that based on the knowledge production function (KPF) shown as the following (Figure 1. P47):

Kleis et al. (2012) collected a panel dataset comprised of annual information on innovation spending research and development (R&D), IT spending, and citation-weighted patents for large U.S. firms between 1987 and 1997. For empirical analysis, Kleis et al. (2012) build two sets of analyses to analyze more than 1800 observations: First, involving a thorough examination of the core research questions. Second, involving further analysis of the impact of IT on innovation output.

The main contribution of this study: (1). The estimation results indicate that IT and R&D both play positive and significant roles in innovation production. (2). The results highlight that R&D has a positive impact on citation-weighted patent output, meanwhile, the firm size is inversely related to patent output. (3). The final results demonstrate an important aspect of IT and the innovation creation process (i.e. networks, e-mail, telecommunication, etc. also contribute to the innovation process). (4). The estimates of the return to investment for IT-driven innovation appear to be economically meaningful and have market value impact.