nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2007‒12‒15
four papers chosen by
Walter Frisch
University Vienna

  1. Diffusion of the internet : a cross-country analysis By Serebrisky, Tomas; Diouf, Mame Astou; Cuberes, David; Andres, Luis
  2. The Effect of Information and Communication Technologies on Urban Structure By Y Ioannides; Henry G. Overman; Esteban Rossi-Hansberg; Kurt Schmidheiny
  3. E-Banking: Risk Management Practices of the Estonian Banks By Dmitri Sokolov
  4. Information Technology, Organization, and Productivity in the Public Sector: Evidence from Police Departments By Luis Garicano; Paul Heaton

  1. By: Serebrisky, Tomas; Diouf, Mame Astou; Cuberes, David; Andres, Luis
    Abstract: This paper analyzes the process of Internet diffusion across the world using a panel of 199 countries during 1990-2004. The authors group countries in two categories-low and high-income countries-and show that the Internet diffusion process is well characterized by an S-shape curve for both groups. Low-income countries display a steeper diffusion curve that is equivalent to a right shift of th e diffusion curve for high-income countries. The estimated diffusion curves provide evidence of a " catching-up " process, although a very slow one. The paper explores the determinants of Internet diffusion at the country level and across the same income groups. The most novel finding is that network effects seem to be crucial-the number of Internet users in a country in a given year is positively associated with the number of users in the previous year. The findings also show that the degree of competition in the provision of Internet service contributes positively to its diffusion, and there are significant positive language externalities.
    Keywords: Technology Industry,Information Security & Privacy,E-Business,Income,Education for the Knowledge Economy
    Date: 2007–12–01
  2. By: Y Ioannides; Henry G. Overman; Esteban Rossi-Hansberg; Kurt Schmidheiny
    Abstract: The geographic concentration of economic activity occurs because transport costs for goods, peopleand ideas give individuals and organisations incentives to locate close to each other. Historically, allof these costs have been falling. Such changes could lead us to predict the death of distance. Thispaper is concerned with one aspect of this prediction: the impact that less costly communication andtransmission of information might have on cities and the urban structure. We develop a model whichsuggests that improvements in ICT will increase the dispersion of economic activity across citiesmaking city sizes more uniform. We test this prediction using cross country data and find empiricalsupport for this conclusion.
    Keywords: ICT, urban structure, cross country data
    JEL: O3 R1
    Date: 2007–07
  3. By: Dmitri Sokolov (Institute of Economics at Tallinn University of Technology)
    Abstract: During the last years the development of e-banking in Estonia has been very significant. According to the report of the World Economic Forum, the Estonian IT-development has been substantial. The success of e-banking in Estonia can be compared to the corresponding success of the Nordic countries. According to the Deutsche Bank Research, around 70-80% of the Internet users in Estonia use Internet banking and in this respect, Estonia could be compared to Finland, Norway and Iceland. Despite of certain benefits, e-banking has turned out a great risk, as bank clients are expecting e-banking services to be available 24 hours a day and seven days a week. The major risks associated with e-banking are strategic, operational, legal and reputational. Security is considered the central operational risk of e-banking. Some of the specific problems cut across risk categories, e.g. breach of security allowing unauthorised access to customer information can be classified as an operational risk, but such an event also exposes the bank to legal risk and reputational risk. Customer education on security risks and precautions can play an important role for consumer protection and for limiting reputational risk. In Estonia, all commercial banks which are engaged in e-banking activities have published on their websites recommendations to potential customers on how to increase the security while making transactions in electronic environment. The Estonian Financial Supervision Authority responsible for the banking supervision has disseminated on its website a special brochure to e-banking customers on how to use the Internet bank safely. At the international level the Basel Committee on Banking Supervision (BCBS) has elaborated risk management principles for e-banking. These risk management principles fall into three broad, and often overlapping, categories: Board and Management Oversight, Security Controls and Legal and Reputational Risk Management. The research question of this paper is whether these risk management principles are implemented at the Estonian banks. In order to assess the risk management practices of the Estonian banks in the field of e-banking as well as their conformity to the BCBS guidelines, the author has prepared a questionnaire and circulated it to all banks. According to the results of the survey, the Estonian banks generally comply with all BCBS guidelines in the field of e-banking risk management.
    Keywords: e-banking, risks, risk management
    JEL: G21
    Date: 2007
  4. By: Luis Garicano; Paul Heaton
    Abstract: We examine how information technology (IT) contributes to organizational change, labordemand, and improved productivity in the public sector using a new panel data set of policedepartments covering 1987-2003. While IT adoption is associated with increasedadministrative and organizational complexity and use of more highly educated officers, ITitself does not appear to enhance crimefighting effectiveness. These results are robust tovarious methods for controlling for agency-level characteristics and the endogeneity of ITuse. IT investments do, however, appear to improve police productivity when complementedwith particular management practices-in this case, those associated with the Compstatprogram.
    Keywords: information technology, management practices, skills, productivity, police
    JEL: L23 M5 O33 K42
    Date: 2007–10

This nep-ict issue is ©2007 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.