nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2014‒11‒01
six papers chosen by
Walter Frisch
Universität Wien

  1. The 2013 PREDICT report: An Analysis of ICT R&D in the EU and beyond By Matilde Mas; Juan Fernández de Guevara Radoselovics
  2. The Effect of the Internet on Newspaper Readability By Abdallah Salami; Robert Seamans
  3. Income Inequality and Technological Adoption By Marcelo Santos; Tiago Neves Sequeira; Alexandra Ferreira Lopes
  4. Video killed the radio star? Evidence from YouTube and iTunes By Tobias Kretschmer; Christian Peukert
  5. Information and Volatility By Dirk Bergemann; Tibor Heumann; Stephen Morris
  6. How Do Open Standards Influence Inventive Activity? Evidence from the IETF By Wen Wen; Chris Forman; Sirkka Jarvenpaa

  1. By: Matilde Mas (Ivie - Instituto Valenciano de Investigaciones Económicas); Juan Fernández de Guevara Radoselovics (Ivie - Instituto Valenciano de Investigaciones Económicas Author-Workplace-Homepage:
    Abstract: The 2013 PREDICT report provides an overview of the importance of the EU ICT sector and its R&D performance. The report gives detailed information on the progress made by the ICT sector comprising both ICT manufacturing and ICT service. The analysis is carried out by comparing EU Member State with other non-EU economies that are currently leading the world economy, including both developed and emerging economies. The report found the trends that the EU ICT sector had a reduction in its share in total value added, business enterprise expenditure on R&D (BERD), R&D personnel and R&D researchers over the period 2006-2010, while its share in terms of employment remained stable. The EU ICT services sector performed better than the ICT manufacturing sector since the former showed more positive results in the observed variables than the economy in general. Finally, the US kept the lead in all variables —but especially in labour productivity and BERD intensity— widening the gap with the EU.
    Keywords: ICT; information and communication technologies; R&D, BERD, ICT manufacturing, ICT services; Europe; US, Asia, indicators.
    JEL: O30 O32 O52
    Date: 2014–09
  2. By: Abdallah Salami (NYU Stern School of Business, 44 West 4th Street, New York, NY 10012 USA); Robert Seamans (NYU Stern School of Business, 44 West 4th Street, New York, NY 10012 USA)
    Abstract: How has the Internet affected newspaper content? We build a dataset that matches newspaper readability measures to Internet penetration at the county-year level from 2000 – 2008. We document a positive relationship between Internet penetration and newspaper readability. This result appears remarkably robust. The relationship is evident in non-parametric graphs of the raw data, annual cross-sections and panel data models. Our cross section results rely on an instrumental variables approach that uses lightning strikes to instrument for Internet penetration. Thus, contrary to a commonly held belief that the Internet is “dumbing down” content, we find evidence supporting the opposite hypothesis: newspaper content appears to be getting more sophisticated in response to increased Internet penetration.
    Keywords: Internet; newspapers; quality; readability; broadband access
    JEL: L15 L25 L86
    Date: 2014–09
  3. By: Marcelo Santos (Departamento de Gestão e Economia and CEFAGE-UBI); Tiago Neves Sequeira (Departamento de Gestão e Economia and CEFAGE-UBI); Alexandra Ferreira Lopes
    Abstract: We relate technological adoption (of different technologies) with income inequality. We discovered that some technologies such as aviation, cell phones, electric production, internet, telephone, and TV are skill-complementary in raising inequality. We constructed standardized indexes of skill-complementary technological adoption for modern Information and Communication Technologies (ICT), older ICT, production and transport technologies. We found strong evidence that older ICT and transport technologies (and less frequently modern ICT) tend to increase inequality. Additionally, we discovered that results are much stronger in rich countries than in poor ones. Our results are quite robust to a series of changes in specifications, estimators, samples, and measurement of technology adoption. These results may bring insights to the design of incentive-schemes for technology adoption.
    Keywords: Income inequality; Technological adoption.
    JEL: I32 O10 O33 O50
    Date: 2014
  4. By: Tobias Kretschmer; Christian Peukert
    Abstract: Making video clips of a song unavailable on YouTube has no effect on its sales on iTunes; but album sales suffer when video clips of a song from it are made unavailable on YouTube. These findings of a study by Tobias Kretschmer and Christian Peukert suggest that we need not worry too much about today's equivalent of the old slogan 'Home taping is killing music'. Their research investigates whether digital sales of songs and albums suffer from videos of the material being freely available online, using a performing rights controversy in Germany that led to far more videos being blocked there than elsewhere: no other country in the world has less access to popular music content on YouTube than Germany, not even South Sudan or Afghanistan. The findings suggest that different digital channels interact in intricate ways - and availability on one can influence success on another.
    Keywords: Sampling, displacement, promotion, natural experiment
    JEL: L82 M37 D83
    Date: 2014–10
  5. By: Dirk Bergemann (Cowles Foundation, Yale University); Tibor Heumann (Dept. of Economics, Yale University); Stephen Morris (Dept. of Economics, Princeton University)
    Abstract: In an economy of interacting agents with both idiosyncratic and aggregate shocks, we examine how the structure of private information influences aggregate volatility. The maximal aggregate volatility is attained in a noise free information structure in which the agents confound idiosyncratic and aggregate shocks, and display excess response to the aggregate shocks, as in Lucas [14]. For any given variance of aggregate shocks, the upper bound on aggregate volatility is linearly increasing in the variance of the idiosyncratic shocks. Our results hold in a setting of symmetric agents with linear best responses and normal uncertainty. We establish our results by providing a characterization of the set of all joint distributions over actions and states that can arise in equilibrium under any information structure. This tractable characterization, extending results in Bergemann and Morris [8], can be used to address a wide variety of questions linking information with the statistical moments of the economy.
    Keywords: Incomplete information, Idiosyncratic shocks, Aggregate shocks, Volatility, Confounding information, Moment restrictions, Linear best responses, Quadratic payoffs, Bayes correlated equilibrium
    JEL: C72 C73 D43 D83
    Date: 2013–12
  6. By: Wen Wen (McCombs School of Business, The University of Texas at Austin, 2110 Speedway Stop B6500, Austin, TX 78712); Chris Forman (Scheller College of Business, Georgia Institute of Technology, 800 West Peachtree Street NW, Atlanta, GA 30308); Sirkka Jarvenpaa (McCombs School of Business, The University of Texas at Austin, 2110 Speedway Stop B6500, Austin, TX 78712)
    Abstract: We examine how standardization in the information and communication technologies affects the inventive activities of firms that do not contribute standards but potentially produce to the standards. In the context of the Internet Engineering Task Force, we find that as a technological area releases 100 more open standards contributed by commercial firms, non-contributing firms have 18%-20% less inventive output in the same technological area. This negative effect of standardization in a technological area is stronger when the standards-contributing firms hold a large fraction of complementary intellectual property rights (IPR) in the area, but is somewhat lessened when the ownership of complementary IPR is highly concentrated among these contributing firms. These effects are also stronger (more negative) on the inventive activity of small firms. In contrast, we find that increases in the number of standards developed solely by academics and others associated with noncommercial entities are positively associated with inventive activity.
    Keywords: standardization; inventive activity; innovation; intellectual property rights
    JEL: L15 L86 O34
    Date: 2014–10

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