nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2008‒04‒12
three papers chosen by
Walter Frisch
University Vienna

  1. Acceleration of Technology Adoption within Firms: Empirical Evidence from the Diffusion of E-business Technologies By Koellinger, Ph.D; Schade, C.
  2. Together but Apart: ICT and Productivity Growth in Israel By Lach, Saul; Shiff, Gil; Trajtenberg, Manuel
  3. Key Issues in Expansion of End-User Mobile Communication in China By Sangwan, S.; Chong, G.; Pau, L-F.

  1. By: Koellinger, Ph.D; Schade, C. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: This paper studies the diffusion of multiple, related technologies among firms. The results suggest an endogenous acceleration mechanism of technology adoption: The more advanced a firm is in using a particular set of technologies, the more likely it is to adopt additional, related technologies. We show that such a mechanism can occur under fairly general circumstances. If firms are not ex ante identical, the endogenous acceleration mechanism suggests a growing divergence in technological endowment of firms in the early phases after the emergence of a new technological paradigm. The theoretical predictions are tested with a dataset that records the adoption times of various e-business technologies in a large sample of firms from 10 different industry sectors and 25 European countries. The results show that the probability to adopt strictly increases with the number of previously adopted e-business technologies. Evidence for a growing digital divide among the companies in the sample is demonstrated for the period from 1994-2002.
    Keywords: technology adoption;technological change;complementarity;hazard rate model;IT
    Date: 2008–03–25
  2. By: Lach, Saul; Shiff, Gil; Trajtenberg, Manuel
    Abstract: There is widespread agreement about the important role played by Information and Communication Technologies (ICTs) in the US productivity revival and in the evolving US-EU productivity gap. In Israel, the ICT sector grew very rapidly during the 1990s and became a hotbed of innovation and technological advance by worldwide standards. Yet, Israel's overall productivity growth remained sluggish, with traditional sectors both in manufacturing and services seemingly unable to benefit from the success of the ICT sector. The main goal of this paper is to shed light on these twin developments. We use newly constructed data on industry-level ICT investments between 1990 and 2003 and estimate production functions for manufacturing industries augmented to include ICT capital. We find a significant elasticity of value-added with respect to ICT capital, which increases considerably with the technological sophistication of the industry. We also find that ICT capital deepening is the most important factor contributing to value added growth in manufacturing during 1995-2000, before the burst of the bubble. Because most ICT capital is concentrated in high tech industries, growth in manufacturing has been mostly confined to the high-tech sector. Facilitating the adoption of ICT in traditional industries is therefore crucial to achieving economy-wide growth. The Israeli experience described here - although restricted to the manufacturing sector - provides a useful example of the benefits and limitations associated with a growth strategy centred on a local ICT producing sector, however successful it might be.
    Keywords: GPT; ICT; productivity growth
    JEL: O3 O4
    Date: 2008–03
  3. By: Sangwan, S.; Chong, G.; Pau, L-F. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: China’s mobile communications market presents unique market challenges. With a high subscriber growth rate but polarized and stratified consumer adoption trends, an investigation into the current status of this market will improve our understanding on how adoption of mobile communications is evolving. In this descriptive paper we analyze key issues relating to market characteristics of mobile communications with an objective to better comprehend the dynamics of this largest mobile subscribers market. Using secondary data we identify mobile industry and end-user related trends to infer our conclusions for the industry.
    Keywords: mobile communication;mobile subscribers market;China
    Date: 2008–03–19

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