Author(s): LOUIS H AMATO, CHRISTIE H AMATO
This paper examines the impact of high technology on multifactor productivity and pricecost margins. Principal components obtained from five technology variables are related to multifactor productivity and price-cost margin. A negative and significant relationship between price-cost margin and high technology methods when industry effects are excluded, becomes insignificant in the industry effects specification. The price-cost margin equations suggest that prior findings of a negative relationship between profitability and high technology may result from omitting industry effects. For multifactor productivity, there is a positive impact from high technology regardless of whether the specification includes industry effects.