nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2008‒06‒21
five papers chosen by
Walter Frisch
University Vienna

  1. The Relationship between Technology, Innovation, and Firm Performance: Empirical Evidence on E-Business in Europe By Koellinger, Ph.D
  2. Transaction Costs, Information Technology and Development By Singh, Nirvikar
  3. Intellectual Property Rights and Ex-Post Transaction Costs: the Case of Open and Closed Source Software By Sebastian von Engelhardt
  4. Tariff-Mediated Network Externalities: Is Regulatory Intervention Any Good? By Hoernig, Steffen
  5. Leadership in online knowledge networks : challenges and coping strategies in a network of practice By Agterberg, M.; Huysman, M.; Hooff, B. van den

  1. By: Koellinger, Ph.D (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: This article analyzes the relationship between the usage of Internet-based technologies, different types of innovation, and performance at the firm level. Data for the empirical investigation originates from a sample of 7,302 European enterprises. The empirical results show that Internet-based technologies were an important enabler of innovation in the year 2003. It was found that all studied types of innovation, including Internet-enabled and non-Internet-enabled product or process innovations, are positively associated with turnover and employment growth. Firms that rely on Internet-enabled innovations are at least as likely to grow as firms that rely on non-Internet-enabled innovations. Finally, it was found that innovative activity is not necessarily associated with higher profitability. Possible reasons for this and implications are discussed.
    Keywords: information technology;e-business;innovation;firm performance;profitability
    Date: 2008–05–26
  2. By: Singh, Nirvikar
    Abstract: This paper examines the impact of transaction costs on economic welfare and development. We extend the static model of Romer (1994), in which transaction costs reduce welfare by the reducing the equilibrium number of intermediate goods, and estimate the welfare losses in the case of domestic transaction costs. The main analysis of the paper extends a dynamic model of Ciccone and Matsuyama (1996) to incorporate transaction costs. We show that high transaction costs reduce the long-run level of development, and may arrest development completely in the extreme case. We also discuss the role of information technology in reducing transaction costs, and offer some preliminary evidence from rural India to illustrate how these reductions may occur through the use of such technologies.
    Keywords: transaction costs; information technology; Internet; development; India
    JEL: P2 L31 O3 O12
    Date: 2008–06–10
  3. By: Sebastian von Engelhardt (Friedrich Schiller University Jena, School of Economics and Business Administration)
    Abstract: The economic characteristics of software and transaction costs explain, why closed source and open source software co-exist. It is about the efficient use of a non- and anti-scarce resource. But because of ex-post transaction costs that lead to information asymmetries, some property rights regarding the resource "source code" are not exclusively separable. Thus, the first best allocation of property rights, that would yield an optimal usage of a source code, is not realizable. Or, that is to say, a first best realization of contracts is not feasible.<br> Hence, open and closed source software are two second best arrangements, both with specific assets and drawbacks. The principle of closed source benefits from direct (monetary) incentives and control, but has limits in its scope (size) because of transaction costs. Open source, on the one hand, benefits from its openness that creates spillovers and enables to incorporate human capital that is not acquirable for closed source firms. On the other hand, there are costs of openness, such as coordination costs (consensus finding, etc.) the danger of free riding or under provision, or forking.
    Keywords: open source, intellectual property rights, transaction costs, information goods, modeling property rights
    JEL: D23 L17 L22 O34
    Date: 2008–06–10
  4. By: Hoernig, Steffen
    Abstract: Mobile phone networks' practice of charging higher prices for off-net than for on-net calls has been pinpointed as the source of two competition problems: underprovision of calls and permanent disadvantages for small networks. We consider these allegations and four different remedies: limiting on/off-net differentials or off-net margins, lower termination fees, and asymmetric termination fees. In all cases a trade-off has to be made between efficiency and networks' profits on the one hand, and consumer surplus on the other. Indeed, the total welfare effects of regulating on/off-net differentials are ambiguous and depend on demand characteristics.
    Keywords: Network competition; on/off-net differentials; retail price controls; termination fees
    JEL: L13 L51 L96
    Date: 2008–06
  5. By: Agterberg, M. (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics); Huysman, M.; Hooff, B. van den
    Abstract: In this paper we explore the challenges and coping strategies for leading online intraorganizational Networks of Practice (NOPs). The research indicates that coordinating distributed knowledge in NOPs poses a leadership challenge that is not yet addressed in the literature on knowledge management in general and is unique when comparing intraorganizational NOPs to research on leadership in other types of online knowledge networks. This challenge entails creating and maintaining a balance between the interests of the formal organization and the interests of the informal network, and shows that coordinating informal knowledge sharing in a formal context involves a management dilemma thereby contributing to theory on coordinating distributed knowledge
    Keywords: distributed knowledge; knowledge coordination; leadership, management dilemma; networks of practice
    Date: 2008

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