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In this paper, we study how firm investments in technology-based employee monitoring impact both misconduct andproductivity. We use unique and detailed theft and sales data from 392restaurant locations from fivedifferent chainsthatadopt atheft monitoring information technology (IT)product. Since the specific timing of individual locations’ technologyadoptionisplausibly exogenous, we can use difference-in-differences modelsto estimate the treatmenteffect of IT (...)