THE EFFECTS OF PRODUCTIVITY AND SCALE ON THE FINANCIAL PERFORMANCE OF INFORMATION TECHNOLOGY COMPANIES

Authors

  • Luiz Artur Ledur Brito Fundação Getulio Vargas
  • Fernando Coelho Martins Ferreira Universidade Presbiteriano Mackenzie

Abstract

Are new economy companies really different? This papers aims at investigating the structure of variability in the financial performance of information technology (IT) companies in Brazil, and also at determining the relation between financial performance and two factors specific to companies, namely economies of scale and productivity. Secondary data of the 200 biggest IT companies of Brazil, referring to years 2000 to 2004, was used. The analysis used the techniques of components of variance and multiple regression. The structure of variability of performance was very similar to companies of other sectors, indicating the predominance of the individual firm effect and limited sector and year effects. These findings might raise a question over the "distinction" of the new economy. The results also indicated a significative effect of producitvity on performance, but the same could not be observed on scale. The practical significance of the relation between productivity and performance is discussed.

Keywords New economy; Information technology; Productivity; Scale; Financial performance.

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Author Biographies

Luiz Artur Ledur Brito, Fundação Getulio Vargas

Doutor em Administração de Empresas pela Escola de Administração de Empresas de São Paulo/Fundação Getulio Vargas (EAESP/FGV). Professor Adjunto da Escola de Administração de Empresas de São Paulo/Fundação Getulio Vargas (EAESP/FGV).

Fernando Coelho Martins Ferreira, Universidade Presbiteriano Mackenzie

Mestre em Administração de Empresas pela Escola de Administração de Empresas de São Paulo/Fundação Getulio Vargas (EAESP/FGV). Professor Assistente do Instituto Presbiteriano Mackenzie (UPM).

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Published

2008-08-28

Issue

Vol. 9 No. 3 (2008)

Section

Presentation

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