INFORMATION TECHNOLOGY FIRM PRODUCTIVITY: INVESTIGATING THE IMPACTS OF SOFTWARE AS A SERVICE MODEL AND WORKER MOBILITY

Abstract

This dissertation includes two studies which investigate the productivity impacts of two important phenomena regarding the information technology (IT) industry. Using public firm-level data from Compustat, Study 1 analyzes the economies of scale of SaaS firms relative to their traditional counterparts by using the Stochastic Frontier Analysis approach. The findings suggest SaaS firms have smaller economies of scale than traditional software firms. Study 2 examines the impacts of worker mobility on the productivity of IT firms. Using a novel structural approach with joint General Moment Method estimation and a large dataset on labor mobility derived from LinkedIn, the study shows that hiring one employee from leading software platform providers i.e., Google, Microsoft, Facebook, and Oracle, is associated with USD $1.14 million increase in value-added of the recipient IT firms. The notable findings enrich the IT productivity literature and also provide managerial implications for IT firm managers and government policy makers.