nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2016‒09‒25
three papers chosen by
Walter Frisch
Universität Wien

  1. ICT development and productivity of transport infrastructure By Na, Kyoung-Youn; Yoon, Chang-ho
  2. A panel data analysis of temporary and permanent effects of fixed broadband penetration over economic growth By Candelaria, José Alberto
  3. The impact of asymmetric regulation on product bundling: The case of fixed broadband and mobile communications in Japan By Kuroda, Toshifumi; Ida, Takanori; Koguchi, Teppei

  1. By: Na, Kyoung-Youn; Yoon, Chang-ho
    Abstract: This paper examines the impact of ICT network on productivity contribution of transportation infrastructure. Using dynamic panel data of OECD member countries, the paper finds that there exists significant complementarity between ICT network and transportation infrastructure. The network effect of motorway infrastructure in OECD countries tends to accelerate when the ICT network grows beyond a certain threshold level.
    Keywords: Intelligent Transport System,ICT convergence,productivity growth,complementarity
    JEL: O47 O38
    Date: 2015
  2. By: Candelaria, José Alberto
    Abstract: This article presents an econometric analysis for the effects of fixed broadband penetration on the growth rate of GDP per capita for a panel of 35 developed and developing countries over an annual period of 33 years (1981 - 2013). The article contributes to the telecommunications literature by distinguishing between temporary and permanent impacts of fixed broadband penetration on economic growth. Our methodology consists of two models, the first one is a fixed effects panel data model which is used as a benchmark, and it controls for contemporaneous and one-period lagged effects of the penetration variable on economic growth. The possibility of an endogeneity issue due to reverse causality is addressed by considering a two-stage instrumental variables (IV) fixed effects model. In a first stage we instrument the fixed broadband penetration variable with fixed telephony subscribers and the internet users for every 100 inhabitants. Then, in a second stage we use the generated fitted values in a panel regression to determine the impact over the growth rate of GDP per capita. Our approach includes as an explanatory variable the Standard and Poor's 500 real index to control for the business cycle of the global economy. Finally, we verify the existence of positive and statistically significant temporal and permanent effects of fixed broadband penetration variable over economic growth.
    Keywords: Fixed Broadband Penetration,Economic Growth,Panel Data Fixed Effects,Instrumental Variables,Temporal and Permanent Effects
    JEL: C23 C26 O47
    Date: 2015
  3. By: Kuroda, Toshifumi; Ida, Takanori; Koguchi, Teppei
    Abstract: Product bundling may benefit or harm consumers dependingon the correlation betweenconsumer willingness to pay for the bundledgoods and the levels of market dominance of firms. We develop astructural demand model that allows for correlatedconsumer's willingness to pay and flexible complementarities/substitutabilities. We estimate thismodel using data fromthree surveys conducted bythe JapanMinistry of Internal Affairs and Communications. The estimation results show that fixed broadband and mobile communications are complements for theJapanese telecommunication incumbentbut ambiguousfor competitors. To assess the effect of asymmetric regulation on product bundling by the incumbent, we conduct a counterfactual analysis of a two-stage game where firms choose whether to set bundle discount or not to set for fixed-broadband and mobile communications at stage one and set prices at stage two. The subgame perfect Nash equilibrium ofthetwo-stage game with/without asymmetric regulation shows that mixed-bundling is the dominant strategy for the incumbent. To avoid cannibalization, the incumbent set large discounts for bundle and set high prices for separate goods. Along with high market dominance of the incumbent, this strategy decreases the consumer surplus by 18.8%. Under subgame perfect Nash equilibrium, thediffusion ratesof fixed broadband decreases from 88.9% to 88.0% andthe diffusion rates of mobile communications increases from 95.25 to 95.71%.We also find that pure bundling,asa toolfor leverage,is not a subgame perfect Nash equilibrium.
    Keywords: Fixed-to-mobile substitution,Bundles,Leverage,Discrete-Choice Model
    JEL: L96 D43
    Date: 2015

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