nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2007‒08‒14
two papers chosen by
Walter Frisch
University Vienna

  1. The Effects of Human Capital on Output Growth in ICT Industries: Evidence from OECD Countries By Gavin Murphy; Iula Traistaru-Siedshlag
  2. Indirect Network Effects, Trade Liberalization, and Excess Standardization By Iwasa, Kazumichi; Kikuchi, Toru

  1. By: Gavin Murphy (Economic and Social Research Institute (ESRI)); Iula Traistaru-Siedshlag (Economic and Social Research Institute (ESRI))
    Abstract: Information and communication technologies (ICT) play a central role in the transition to knowledge - based economies. In this paper we analyse the effects of human capital in fostering output growth in ICT manufacturing and services using data from a sample of twenty OECD countries over the period 1980-2002. We focus on within country between industry differences and estimate a system of simultaneous equations to account for simultaneous effects of human capital on physical investment and output growth. The results of our econometric analysis suggest that countries with a high human capital stock experienced faster output growth in ICT producing manufacturing and ICT using services. Also, in countries with high human capital improvement over the analysed period output grew relatively faster in ICT producing manufacturing industries. Furthermore, we find that past country level educational attainment reflected in the human capital stock and human capital accumulation over the analysed period had a direct positive and significant effect on physical capital investment. Our findings indicate that in developed countries human capital is an important factor driving the ICT industries growth.
    Keywords: Human capital, ICT industries, Economic growth
    JEL: E62 F43 O33
    Date: 2007–03
  2. By: Iwasa, Kazumichi; Kikuchi, Toru
    Abstract: Indirect network effects exist when the utility of consumers is increasing in the variety of complementary software products available for use with an electronic hardware device. In this study, we examine how trade liberalization affects production structure in the presence of indirect network effects. For these purposes we construct a simple two-country model of trade with two incompatible hardware technologies. It is shown that, given that both types of hardware exist before trade liberalization, liberalization may reduce the variety of hardware technology via intensified network effects. It is also shown that, contrary to the findings of previous studies, some consumers may become worse off as the result of trade. In other words, trade liberalization,which forms the basis for a greater variety of software products, may work as a catalyst for excess hardware standardization.
    Keywords: Indirect Network Effects; Trade Liberalization
    JEL: F12
    Date: 2007

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