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Exploring the IT Productivity Paradox in Higher Education: The Influence of IT Funding on Institutional Productivity

ABSTRACT Information technology (IT) spending has increased in every sector of higher education during the past decade despite a lack of meaningful data pertaining to its impact on productivity. This study, which was guided by the production theory, used a unique data set and dynamic fixed-effects panel model to examine the relationship between IT funding and institutional productivity in the form of teaching, research, and service outputs. Findings revealed that investments in IT are positively related with teaching and service outputs for private and nondoctoral institutions, whereas investments in IT are positively associated with research outputs for public and doctoral institutions.