The effect of information technology on productivity in retailing

Abstract

As labor costs rise faster than both inflation and sales, retailers are attempting to increase productivity by substituting information technology for labor. However, there exist disagreements over the potential benefits of adopting this strategy. The purpose of this study is to examine whether information technology contributes to the productivity of retail institutions. The results indicate that information technology is a productive input for retailers. Also, evidence exists that retailers are underutilizing information technology. © 1996 New York University. All rights of reproduction in any form reserved.