nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2006‒09‒23
three papers chosen by
Walter Frisch
University Vienna

  1. Forecasting using Bayesian and Information Theoretic Model Averaging: An Application to UK Inflation By George Kapetanios; Vincent Labhard; Simon Price
  2. ICT Adoption and Productivity in Developing Countries: New Firm Level Evidence from Brazil and India By Rakesh Basant; Simon Commander; Rupert Harrison; Naercio Menezes-Filho
  3. Knowledge-Driven Economic Development By Sanghamitra Bandyopadhyay

  1. By: George Kapetanios (Queen Mary, University of London); Vincent Labhard (Bank of England); Simon Price (Bank of England)
    Abstract: In recent years there has been increasing interest in forecasting methods that utilise large datasets, driven partly by the recognition that policymaking institutions need to process large quantities of information. Factor analysis is one popular way of doing this. Forecast combination is another, and it is on this that we concentrate. Bayesian model averaging methods have been widely advocated in this area, but a neglected frequentist approach is to use information theoretic based weights. We consider the use of model averaging in forecasting UK inflation with a large dataset from this perspective. We find that an information theoretic model averaging scheme can be a powerful alternative both to the more widely used Bayesian model averaging scheme and to factor models.
    Keywords: Forecasting, Inflation, Bayesian model averaging, Akaike criteria, Forecast combining
    JEL: C11 C15 C53
    Date: 2006–09
  2. By: Rakesh Basant (Indian Institute of Management Ahmedabad); Simon Commander (London Business School and IZA Bonn); Rupert Harrison (Institute for Fiscal Studies, London); Naercio Menezes-Filho (Universidade de São Paulo)
    Abstract: This paper uses a unique new data set on nearly a thousand manufacturing firms in Brazil and India to investigate the determinants of ICT adoption and its impact on performance in both countries. The descriptive evidence shows that Brazilian firms on average use ICT more intensively than their Indian counterparts but changes over time have been rather similar in both places. Within countries ICT intensity is strongly related to size, ownership structure, share of administrative workers and education. The econometric evidence documents a strong relationship between ICT capital and productivity in both countries, even after controlling for several other factors, including firm-specific fixed-effects. The rate of return of ICT investment seems to be much larger than usually found in more developed countries. Specific types of organisational changes matter for the return of ICT, but only for high adopters. Firms report several constraints to ICT investment in both countries and power disruption seems to significantly depress adoption and returns to ICT expenditures in India. This may be indicative of the impact of a cluster of poor institutions and/or infrastructure on performance.
    Keywords: ICT, productivity
    JEL: J2 E20 L20 L60 O33
    Date: 2006–09
  3. By: Sanghamitra Bandyopadhyay
    Abstract: This paper examines the impact of mass media and information and communications technologies (ICT) as knowledge-based infrastructures on economic development. The results strongly suggest that both mass media and ICT penetration are negatively associated with corruption. This result holds across both the entire sample (of both developed and developing countries), and only for developing countries. The same result is also obtained for the effects of ICT and mass media on economic inequality. However, ICT reveals itself inequality increasing for the developing country sample but inequality decreasing for the entire sample. Finally, lower poverty is robustly associated with higher media (newspaper circulation) penetration.
    Keywords: Information and Communications Technologies, Mass Media, Economic Growth and Development, Poverty, Corruption, Inequality
    JEL: D30 D80 O1 O57
    Date: 2006

This nep-ict issue is ©2006 by Walter Frisch. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.