The Impact of Information Technology on Production: A Case Study of the Iranian Manufacturing Industy

Technology has long been considered very important to contribute to economic growth through productivity improvement. The empirical studies indicate that the contribution of information technology(IT) to growth in developed and some developing countries over the second half of the 1990s has been significant. There is still room for more investigation, specially in developing countries where the socio-economic infrastructure may not fully support the IT and economic growth relationship. This study uses an explicit production function to estimate the elasticity of IT factors in the Iranian manufacturing industry using the panel data method covering the period 2000-2001.Reveal that IT has had a positive and significant effect on the production in the Iranian manufacturing industry. Our results suggest that an increase in IT expenditure beside improving complementary factors will eventually lead to higher labour productivity and growth in manufacturing industry.