| By: |
Chia-Lin Chang (Department of Applied economics, Department of Finance National Chung Hsing University, Taiwan.);
Yu-Chieh Wu (Department of Applied Economics National Chung Hsing University Taichung, Taiwan.);
Michael McAleer (Department of Quantitative Finance National Tsing Hua University, Taiwan and Econometric Institute Erasmus School of Economics Erasmus University Rotterdam, The Netherlands and Department of Quantitative Economics Complutense University of Madrid, Spain And Institute of Advanced Sciences Yokohama National University, Japan.) |
| Abstract: |
This paper investigates the effect of industrial penetration (geographic
concentration of industries) and internet intensity (the proportion of
enterprises that use the internet) for Taiwan manufacturing firms, and
analyses whether the relationships are substitutes or complements. The sample
observations are based on 153,081 manufacturing plants, and covers 26
two-digit industry categories and 358 geographical townships in Taiwan. The
Heckman selection model is used to accommodate sample selectivity for
unobservable data for firms that use the internet. The empirical results from
two-stage estimation show that: (1) a higher degree of industrial penetration
will not affect the probability that firms will use the internet, but will
affect the total expenditure on internet intensity; (2) for two-digit SIC
industries, industrial penetration generally decreases the total expenditure
on internet intensity; and (3) industrial penetration and internet intensity
are substitutes. |
| Keywords: |
Industrial penetration, Internet intensity, Sample selection, Incidental truncation. |
| JEL: |
D22 L60 |
| Date: |
2018–01 |
| URL: |
http://d.repec.org/n?u=RePEc:ucm:doicae:1802&r=ict |