2012 | Nicholas Bloom, Raffaella Sadun, and John Van Reenen
The article "Americans Do IT Better: US Multinationals and the Productivity Miracle" by Nicholas Bloom, Raffaella Sadun, and John Van Reenen examines the productivity growth of US multinationals in Europe compared to non-US multinationals and domestic firms. The authors find that US multinationals operating in Europe experienced a significant productivity miracle, particularly in sectors that heavily use information technologies (IT). They attribute this advantage to tougher "people management" practices, such as better hiring, promotions, rewards, and firing policies, which enable US firms to better exploit IT. The study uses two micro panel datasets: one from the UK Census Bureau and another from seven European countries, combining IT expenditure and productivity data. The results show that US multinationals are more IT-intensive and have higher productivity from IT than non-US multinationals and domestic firms. This advantage is particularly pronounced in sectors responsible for the US productivity acceleration after 1995, such as retail and wholesale. The authors conclude that the higher productivity of US multinationals is primarily due to their superior management practices, which facilitate the effective use of IT.The article "Americans Do IT Better: US Multinationals and the Productivity Miracle" by Nicholas Bloom, Raffaella Sadun, and John Van Reenen examines the productivity growth of US multinationals in Europe compared to non-US multinationals and domestic firms. The authors find that US multinationals operating in Europe experienced a significant productivity miracle, particularly in sectors that heavily use information technologies (IT). They attribute this advantage to tougher "people management" practices, such as better hiring, promotions, rewards, and firing policies, which enable US firms to better exploit IT. The study uses two micro panel datasets: one from the UK Census Bureau and another from seven European countries, combining IT expenditure and productivity data. The results show that US multinationals are more IT-intensive and have higher productivity from IT than non-US multinationals and domestic firms. This advantage is particularly pronounced in sectors responsible for the US productivity acceleration after 1995, such as retail and wholesale. The authors conclude that the higher productivity of US multinationals is primarily due to their superior management practices, which facilitate the effective use of IT.