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Working Paper
The Adoption of Non-Rival Inputs and Firm Scope
Custom software is distinct from other types of capital because it is non-rival—once a firm invests in it, the software can be used simultaneously across its many establishments. Using confidential U.S. Census data, we document that while firms with more establishments are more likely to invest in custom software, they spend less on it as a share of total capital expenditures. We explain these empirical patterns by developing a model that incorporates the non-rivalry of software and the firm’s choice of scope. Firms choose whether to adopt custom software, the intensity of their ...
Working Paper
The Adoption of Non-Rival Inputs and Firm Scope
Custom software is distinct from other types of capital in that it is non-rival---once a firm makes an investment in custom software, it can be used simultaneously across its many establishments. Using confidential US Census data, we document that while firms with more establishments are more likely to invest in custom software, they spend less on it as a share of total capital expenditure. We explain these empirical patterns by developing a model that incorporates the non-rivalry of custom software. In the model, firms choose whether to adopt custom software, the intensity of their ...
Working Paper
The Adoption of Non-Rival Inputs and Firm Scope
Custom software is distinct from other types of capital in that it is non-rival---once a firm makes an investment in custom software, it can be used simultaneously across its many establishments. Using confidential US Census data, we document that while firms with more establishments are more likely to invest in custom software, they spend less on it as a share of total capital expenditure. We explain these empirical patterns by developing a model that incorporates the non-rivalry of custom software. In the model, firms choose whether to adopt custom software, the intensity of their ...
Aggregate Implications of the Rise in Firms’ Custom Software Investments
U.S. firms’ investment in custom software has risen markedly. This analysis examines its effect on aggregate outcomes like sales concentration and productivity.