Productivity growth in the public accounting industry: the roles of information technology and human capital

Jengfang Chen, Hsihui Chang, Rong-Ruey Duh, Shu-Hsing Li

Research output: Contribution to journalArticlepeer-review

30 Citations (Scopus)

Abstract

In this paper we decompose productivity growth into four components: efficiency change, technical progress, information technology (IT) capital accumulation, and human capital accumulation. We analyze data on the operations of 51 public accounting firms in Taiwan for the years 1993 and 2003, and find that productivity growth was driven primarily by the accumulation of IT capital and human capital. We also find that the difference in productivity growth between Big 4 and non-Big 4 accounting firms is attributable to technical progress and, especially, IT capital accumulation. Further, our multiple regression results indicate that accounting firms that had high growth in nonaudit services (NAS) during the 11-year period enjoyed significantly higher productivity growth through greater IT capital and human capital accumulation than firms that remained focused on traditional audit services.
Original languageEnglish
Pages (from-to)21-48
JournalAuditing : a journal of practice and theory
Volume30
Publication statusPublished - 2011
Externally publishedYes

Keywords

  • productivity growth
  • efficiency change
  • technical progress
  • IT capital accumulation
  • human capital accumulation
  • Big 4
  • non-audit services

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