Augmenting productivity analysis with data mining: An application on IT business value

In this paper we use a large firm-level dataset to extend previous studies by augmenting the endogenous growth accounting framework with a data mining technique to analyze the complex relationships between the use of IT and organizational practices. There is emerging evidence of recent emphasis on organizational factors and a greater shift towards “IT complementarities” in which value addition is linked to combining complementary organizational practices with IT investments. Our findings indicate that the set of interrelated organizational practices that complement positively to IT use is different from the set of practices hindering IT use. The presence of clustering among organizational practices clearly implies that some combinations of practices make it difficult to precisely empirical examine. We have found that our technique was able to show some organizational factors may have different pathways to affect organizational performance and such organizational practices have often been overlooked but can play a weak yet non-trivial role in production and organizational processes.