TY  - JOUR
AU  - Garicano,Luis
AU  - Rossi-Hansberg,Esteban
TI  - Organizing Growth
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13705
PY  - 2007
Y2  - December 2007
UR  - http://www.nber.org/papers/w13705
L1  - http://www.nber.org/papers/w13705.pdf
N1  - Author contact info:
Luis Garicano
Departments of Management and Economics and
Centre for Economic Performance
London School of Economics
Houghton Street
London WC2A 2AE
United Kingdom
E-Mail: garicano@lse.ac.uk

Esteban Rossi-Hansberg
Princeton University
Department of Economics
Fisher Hall
Princeton, NJ 08544-1021
Tel: 609/2584024
Fax: 650/725-5702
E-Mail: erossi@princeton.edu
AB  - We study the impact of information and communication technology on growth through its impact on organization and innovation.  Agents accumulate knowledge through two activities: innovation (discovering new technologies) and exploitation (learning how to use the current technology). Exploitation requires the development of organizations to coordinate the work of experts, which takes time. The costs and benefits of such organizations depend on the cost of communicating and acquiring information. We find that while advances in information technology that lower information acquisition costs always increase growth, improvements in communication technology may lead to lower growth and even to stagnation, as the payoff to exploiting innovations through organizations increases relative to the payoff of new radical innovations.
ER  -