nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2010‒02‒20
four papers chosen by
Walter Frisch
University Vienna

  1. The Impact of Information Technology on Productivity in Developing Countries By Ronia Hawash; Guenter Lang
  2. The Impact of ICT Investments on the Relative Demand for High-, Medium-, and Low-Skilled Workers: Industry versus Country Analysis By Dorothee Schneider
  3. Memo to the New Digital Agenda Commissioner By Bruno van Pottelsberghe; Reinhilde Veugelers
  4. Technology Adoption, Social Learning, and Economic Policy By Paul Heidhues; Nicolas Melissas

  1. By: Ronia Hawash (Faculty of Management Technology, The German University in Cairo); Guenter Lang (Faculty of Management Technology, The German University in Cairo)
    Abstract: The information technology (IT) revolution has resulted in a digital divide evolving between nations that have the skills and capability to absorb these new technologies, and those without. Since developing countries have assumed that the adoption of IT may be their key engine of growth, they have exerted a lot of efforts in an attempt to overcome this digital gap. This study tests whether higher IT adoption results in higher total factor productivity (TFP) growth of developing countries or not, by conducting a panel data regression for 33 developing countries over the period 2002-2006. It also examines the relative importance of IT adoption in comparison to other technological aspects such as: Technology creation, technology transfer, and enhancing individuals’ technological absorptive capacities through higher educational levels. The study concludes that IT adoption and higher educational attainment tend to relatively be the most significant factors affecting TFP growth in developing countries.
    Keywords: Information Technology, Productivity, Digital Divide, Development
    JEL: O33 O47
    Date: 2010–02
  2. By: Dorothee Schneider
    Abstract: In this paper I analyze the effects of information and communication technology (ICT) on compensation shares of high-, medium-, and low-skilled workers. Com- pared to other studies, I investigate this question using a considerably richer data set with respect to the length of time series, set of countries and industries, and information on ICT. Next to investigating the influence of ICT in 14 countries, I concentrate on the analysis in 23 separate industries. The results I find show that the skill-biased technological change hypothesis is rejected if single countries are analyzed with an industry panel, while I find that technological change is a cause of changes in the relative compensation shares in single industries. Here there is a positive influence of ICT on high-skilled workers' relative compensation for the time before 1995, while ICT investments drive the medium- and low-skilled com- pensation shares together for a substantial amount of industries, especially since 1995.
    Keywords: ICT, Skill, Income Inequality, Labor Demand
    JEL: J21 J23 J31
    Date: 2010–02
  3. By: Bruno van Pottelsberghe; Reinhilde Veugelers
    Abstract: Senior Resident Fellows Reinhilde Veugelers and Bruno van Pottelsberghe provide recommendations for the term of new Digital Agenda Commissioner Neelie Kroes in this supplement to Bruegel's Memos to the New Commission: Europe's Economic Priorities 2010-2015. They argue that Kroes should move past a focus on infrastructure and concentrate more on ICT's potential to contribute to growth in the European Union. This should include a focus on emerging ICT products and services to helpl foster an ICT single market and more public support for R&D and innovation, through tailored programmes designed to aid high-risk innovative projects conceived by new ICT companies.
    Date: 2010–01
  4. By: Paul Heidhues (University of Bonn and CERP); Nicolas Melissas (CIE | ITAM)
    Abstract: We study a two-player dynamic investment model with information externalities and provide necessary and sufficient conditions for a unique switching equilibrium. When the public information is sufficiently high and a social planer therefore expects an investment boom, investments should be taxed. Conversely, any positive investment tax is suboptimally high if the public information is sufficiently unfavorable. We also show that an investment tax may increase overall investment activity.
    Keywords: Information Externality, Strategic Waiting, Delay, Information Cascade, Investment Boom, Optimal Taxation
    JEL: D62 D83
    Date: 2009–02

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