nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2018‒09‒10
five papers chosen by
Walter Frisch
Universität Wien

  1. Does Machine Translation Affect International Trade? Evidence from a Large Digital Platform By Erik Brynjolfsson; Xiang Hui; Meng Liu
  2. Technological change and economic development: endogenous and exogenous fluctuations By Marianna Epicoco
  3. Prioritization vs Zero-Rating: Discrimination on the Internet By Axel Gautier; Robert Somogyi
  4. Keep It Simple: A Field Experiment on Information Sharing in Social Networks By Cátia Batista; Marcel Fafchamps; Pedro C. Vicente
  5. Investigating the relevance of mobile technology adoption on inclusive growth in West Africa By Jeremiah O. Ejemeyovwi; Evans S. Osabuohien

  1. By: Erik Brynjolfsson; Xiang Hui; Meng Liu
    Abstract: Artificial intelligence (AI) is surpassing human performance in a growing number of domains. However, there is limited evidence of its economic effects. Using data from a digital platform, we study a key application of AI: machine translation. We find that the introduction of a machine translation system has significantly increased international trade on this platform, increasing exports by 17.5%. Furthermore, heterogeneous treatment effects are all consistent with a substantial reduction in translation-related search costs. Our results provide causal evidence that language barriers significantly hinder trade and that AI has already begun to improve economic efficiency in at least one domain.
    JEL: D8 F1 F14 O3 O33
    Date: 2018–08
  2. By: Marianna Epicoco
    Abstract: This paper aims at exploring the endogenous and exogenous forces that determine long-run fluctuations of innovative and economic activity. It proposes that technological paradigm shifts, structural change and major fluctuations of production are the result of the same endogenous process. This is defined as a co-evolutionary process between technological and economic variables based on cumulative multiplier and accelerator feedback effects between investments in innovation and demand. Exogenous factors are supposed to act upon this endogenous process, influencing the length and amplitude of fluctuations. This framework contributes to extant literature as it envisages an explicit endogenous mechanism explaining cyclical fluctuations of innovative and economic activity, and, at the same time, incorporates exogenous factors. Moreover, by combining the Schumpeterian analyses of innovation dynamics with the multiplier and accelerator effects coming from Keynesian theories, the framework integrates the impact of technological variables on economic activity and vice versa. To provide a preliminary supporting evidence, we have fitted the ICT cycle and the economic cycle to patent and productivity data, respectively. Our results suggest that the growth potential of ICT could be declining. This situation may represent an important opportunity, for public policy and socioinstitutional actors, to orient future development toward socially desirable directions.
    Keywords: technological paradigm shift, structural change, economic fluctuations, co-evolution, productivity slowdown, ICT.
    JEL: O33 O40 O11 E32
    Date: 2018
  3. By: Axel Gautier; Robert Somogyi
    Abstract: This paper analyzes two business practices on the mobile internet market, paid prioritization and zero-rating. Both violate the principle of net neutrality by allowing the internet service provider to discriminate different content types. In recent years these practices have attracted considerable media attention and regulatory interest. The EU, and until recently the US have banned paid prioritization but tolerated zero-rating under conditions. With prioritization, the ISP delivers content at different speeds and it is equivalent to a discrimination in terms of quality. With zero-rating, the ISP charges different prices for content and it is equivalent to a discrimination in terms of prices. We first show that neither of these practices lead to the exclusion of a content provider, a serious concern of net neutrality advocates. The ISP chooses prioritization when traffic is highly valuable for content providers and congestion is severe, and zero-rating in all other cases. Furthermore, investment in network capacity is suboptimal in the case of prioritization and socially optimal under zero-rating.
    Keywords: net neutrality, paid prioritization, zero-rating, sponsored data, data cap, congestion
    JEL: D21 L12 L51 L96
    Date: 2018
  4. By: Cátia Batista; Marcel Fafchamps; Pedro C. Vicente
    Abstract: SMS information campaigns are increasingly used for policy. To investigate their effectiveness, we conduct a lab-in-the-field experiment to study information sharing through mobile phone messages. Subjects are rural households in Mozambique who have access to mobile money. In the base treatment, subjects receive an SMS containing information on how to redeem a voucher. They can share this information with other exogeneously assigned subjects. We find that few participants redeem the voucher. They nonetheless share it with others and many share information they do not use themselves. Information is shared more when communication is anonymous and we find no evidence of homophily in information sharing. We introduce treatments to vary the cost of sending a message, shame those who do not send the voucher to others, or allow subjects to appropriate the value of information. All decrease information sharing. To encourage information sharing, the best is to keep it simple.
    JEL: D64 D83 O33
    Date: 2018–08
  5. By: Jeremiah O. Ejemeyovwi (Covenant University, Nigeria); Evans S. Osabuohien (Covenant University, Nigeria)
    Abstract: This paper empirically investigates the role of mobile technology adoption on inclusive growth in 15 West African countries with a view to ascertaining if the positive role of mobile technology adoption on human development as established in other regions holds in West Africa. It used data from World Development Indicators for the period 2004 to 2014, which was estimated with system generalised method of moments (SGMM). The SGMM results show that mobile cell subscription has a statistically insignificant effect on inclusive growth in West Africa which refutes the positive and significant role of mobile technology adoption on inclusive growth. The possible reasons for the results and recommendations are documented in the study.
    Keywords: ICT; Inclusive growth; Mobile technology; SGMM
    JEL: O30 O15
    Date: 2018–01

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