Productivity, investment in ICT and market experimentation: micro evidence from Germany und the US

This paper examines the relationship between the use of advanced technologies such as ICT, and outcomes such as productivity, the skill mix of the workforce and wages using micro data for the U.S. and Germany. We find support to the idea that U.S. businesses engage in experimentation in a variety of ways not matched by their German counterparts. In particular, there is greater experimentation amongst young U.S. businesses and also among those actively changing their technology. This is evidenced in a greater dispersion in productivity and related key business choices. We also find that the mean impact of adopting new technology on productivity and wages is greater the in U.S. than in Germany.