Title: The impact of technology assets on small firms' productivity: empirical findings in Chile

Authors: Jose O. Maldifassi, Manuel A. Rodriguez

Addresses: School of Industrial Engineering, Universidad Adolfo Ibanez, Balmaceda 1625, Recreo – Vina del Mar, Chile. ' SubGerencia de Informacion, Socofin S.A., Bandera 577, Santiago, Chile

Abstract: A group of 24 small manufacturing firms located in Santiago, Chile, that operate in four different industries was analysed in detail to assess the impact that technology assets (manufacturing equipment, vehicles, computers, etc.) have on the overall productivity of workers and firms. Using a Cobb–Douglas production function it was found that, for all the firms studied, technology assets have a larger marginal productivity than total yearly salaries and that small firms all show increasing returns to scale. The productivity of the workers was found to be dependent on the average years of education and the available technology assets per worker. Average productivity of technology assets and total salaries of labourers were calculated, resulting in figures that could be used for planning purposes. These findings could help small firms to make their business strategy better by means of more efficient and productive manufacturing capabilities.

Keywords: small firms; productivity; technology assets; labour costs; returns to scale; marginal productivity; Cobb–Douglas production function; manufacturing capabilities; Chile; business strategy; entrepreneurship.

DOI: 10.1504/IJBPM.2005.006490

International Journal of Business Performance Management, 2005 Vol.7 No.2, pp.191 - 207

Published online: 14 Mar 2005 *

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