nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2010‒10‒02
four papers chosen by
Walter Frisch
University Vienna

  1. The Direct and Indirect Effect of Exchange to Build Customer Loyalty in Social Network Sites. By Anandya, Dudi
  2. The Impact of the Diffusion of a Financial Innovation on Company Performance: An Analysis of SWIFT Adoption By Susan Scott; John Van Reenen; Markos Zachariadis
  3. The Web's Promotional Effect and Artists' Strategies By Francesco BALDUCCI
  4. IT is never too late for changes? Analysing the relationship between process innovation, IT and older workers By Bertschek, Irene; Meyer, Jenny

  1. By: Anandya, Dudi
    Abstract: The Internet has enabled people to connect to each other, regardless of time and space. This lead to a new phenomena, known as social networking through social network sites such Facebook, and Friendster. In social network sites members find new kinds of exchange, which is information exchange. Membership in many social network sites are free, which means that everyone is free to join or leave it. In that case social network providers must ensure that members keep using their site. Exchange has been known as subject matter in marketing. Exchange will lead to customer loyalty through value creation. This paper will show that exchange has direct impact to loyalty. The community based theory has been shown that if community members keep exchange activity, they will loyal to the community. The author will focus on friendship based communities such as Facebook.
    Keywords: Exchange; Value; Community; Social Network Site
    JEL: M3
    Date: 2010–04–16
  2. By: Susan Scott; John Van Reenen; Markos Zachariadis
    Abstract: How does a major financial network innovation influence firm performance? Despite muchspeculation we have little hard quantitative evidence about the impact of technology diffusionin financial services. In this paper we use the entire adoption history for SWIFT (the Societyfor Worldwide Interbank Financial Telecommunication - standards provider and messagingcarrier) matched to bank-level panel data for the US, Canada and 27 European countries. Ourdataset covers almost 7,000 banks (including 1,689 SWIFT adopters) between 1998 and2005. We find that adoption appears to have large effects on profitability, but it takes severalyears before any positive return is discernible, consistent with the idea of significantcomplementarities between new technologies and firm organization. The profitability effectoperates by both raising sales and decreasing operating costs and is greater for smaller firmsthan larger firms. Although the long-run effects are similar, US and UK banks appear to reapthe benefits from adoption more quickly than their Continental European counterparts. This isconsistent with the idea that the impact of information and communication technologies isstronger in the US than Europe due to lower adjustment costs.
    Keywords: Diffusion, profitability, banks, SWIFT
    JEL: O33 N20
    Date: 2010–08
  3. By: Francesco BALDUCCI (Universita' Politecnica delle Marche, Dipartimento di Economia)
    Abstract: The paper explores one of the new business models of the music market proposed by Varian (2005): the importance of the promotional effect of web-based diffusion. An indirect form of such investment consists in non-opposition by artists against the circulation of their music files online, or, likewise, their choice of permitting free downloads of their music albums. The profits lost from legal sales - online or on traditional supports - may be off-set by promotional advantages deriving from greater diffusion, with an increase in the artist's market share. The model assumes the existence of a strong network effect and an exchange of information, opinions and contents among web users. The model's results are determined by the initial conditions, i.e. by an artist's market share at an initial instant of time: or in other words, by his/her popularity. It is shown that emerging artists should make maximum investment in promotion, so that the diffusion of their work can be driven by the network effect and they can emerge from anonymity. Instead, for well-established artists, whose market shares are already large, the optimal strategy is to make the least promotional effort, given that the spontaneous diffusion of their work is already high.
    Keywords: Artists' strategies, network effect, peer to peer, promotion
    JEL: L82 O33 Z11
    Date: 2010–07
  4. By: Bertschek, Irene; Meyer, Jenny
    Abstract: The paper analyses the relationship between two major challenges firms are faced to: using the potentials of information technologies (IT) as an enabler of process innovations on the one hand and an ageing workforce that might interfere these potentials on the other hand. Econometric results based on firm-level data from the German manufacturing and service sectors reveal that firms with a higher IT-intensity are more likely to introduce new or improved processes. Older workers are harmful to the probability of process innovation based on IT. Leaving the negative relationship between older workers and the probability to innovate unaffected, IT-specific training for older workers is conducive to the realisation of process innovations. Thus, not older workers in general are harmful to firms' innovation capabilities, but older workers who lack the appropriate IT skills. -- Die Schlüsselrolle von Informations- und Kommunikationstechnologien (IKT) für Produktivität und Wachstum ist mittlerweile unumstritten. Als Basistechnologien sind IKT in allen Branchen einsetzbar und ermöglichen Produkt- und Prozessinnovationen, welche wiederum zu positiven Produktivitätseffekten führen und die langfristige Wettbewerbsfähigkeit von Firmen sicherstellen können. Während einerseits der Einsatz von IT Firmen die Möglichkeit bietet Geschäftsprozesse umzugestalten und sie bei ihrer Innovationsaktivität zu unterstützen, so sehen sich Firmen andererseits einer alternden Belegschaft gegenüber. Die Wahrscheinlichkeit und Häufigkeit der Nutzung von IT und Software ist indes nicht für alle Altersgruppen gleich. Im Jahr 2008 nutzten 28 Prozent der 55- bis 64-Jährigen einen Computer am Arbeitsplatz, während dies bei jeweils mehr als 50 Prozent der Beschäftigten im Alter von 25 bis 54 Jahren der Fall war. Dies mag zum Teil daran liegen, dass ältere Beschäftigte in Positionen mit keinem oder einem geringeren IT-Einsatz tätig sind. Verschiedene empirische Studien zeigen jedoch, dass ältere Beschäftigte, im Vergleich zu Jüngeren, geringere IT-Fähigkeiten und ein niedrigeres Niveau im Umgang mit IT erreichen. Im vorliegenden Papier gehen wir der Fragestellung nach, ob die Altersstruktur der Belegschaft einen Einfluss auf die durch IT geförderten Innovationsaktivitäten hat. Die Ergebnisse zeigen, dass die Wahrscheinlichkeit Prozessinnovationen zu realisieren positiv und signifikant mit der IT-Intensität einer Firma zusammenhängt. Der Anteil der Beschäftigten, die älter als 49 Jahre sind, hängt hingegen negativ mit der Innovationswahrscheinlichkeit zusammen. Diese negative Beziehung wird dadurch verstärkt, dass die Interaktion zwischen dieser Altersgruppe und der IT-Intensität negativ mit der Prozessinnovationswahrscheinlichkeit korreliert ist. IT-Weiterbildung für ältere Beschäftigte ist der Innovationswahrscheinlichkeit zuträglich. Das bedeutet, dass nicht grundsätzlich ältere Beschäftigte die Innovationsfähigkeit von Firmen hemmen, sondern ältere Beschäftigte, denen die geeigneten IT-Fähigkeiten fehlen.
    Keywords: process innovation,information technology,older workers
    JEL: J14 L23 O31
    Date: 2010

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