nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2019‒07‒22
three papers chosen by
Marek Giebel
Universität Dortmund

  1. Technology-Induced Trade Shocks? Evidence from Broadband Expansion in France By Clément Magouyres; Thierry Mayer; Clément Mazet
  2. Accounting for Innovations in Consumer Digital Services: IT still matters By David M. Byrne; Carol Corrado
  3. South Asia: Formulating Services Sector Policies for Development, A Policy Perspective By Prachi Agarwal

  1. By: Clément Magouyres (Ecole d'Économie de Paris - Paris School of Economics (PSE)); Thierry Mayer (Département d'économie); Clément Mazet (Département d'économie)
    Abstract: In this paper, we document the presence of “technology-induced” trade in France between 1997 and 2007 and assess its impact on consumer welfare. We use the staggered roll-out of broadband internet to estimate its causal effect on the importing behavior of affected firms. Using an event-study design, we find that broadband expansion increases firm-level imports by around 25%. We further find that the “sub-extensive” margin (number of products and sourcing countries per firm) is the main channel of adjustment and that the effect is larger for capital goods. Finally, we develop a model where firms optimize over their import strategy and which yields a sufficient statistics formula for the quantification of the effects of broadband on consumer welfare. Interpreted within this model, our reduced-form estimates imply that broadband internet reduced the consumer price index by 1.7% and that the import-channel, i.e. the enhanced access to foreign goods that is allowed by broadband, accounts for a quarter of that effect.
    Keywords: Internet; Trade; Imports; Consumer welfare
    JEL: F14 F15 L23 O33
    Date: 2019–07
  2. By: David M. Byrne; Carol Corrado
    Abstract: This paper develops a framework for measuring digital services in the face of ongoing innovations in the delivery of content to consumers. We capture what Brynjolfsson and Saunders (2009) call "free goods" as the capital services generated by connected consumers' stocks of IT digital goods; this service flow augments the existing measure of personal consumption in GDP. Its value is determined by the intensity with which households use their IT capital to consume content delivered over networks, and its volume depends on the quality of the IT capital. Consumers pay for delivery services, however, and the complementarity between device use and network use enables us to develop a quality-adjusted price measure for the access services already included in GDP. Our new estimates imply that accounting for innovations in consumer content delivery matters: The innovations boost consumer surplus by nearly $1,800 (2017 dollars) per connected user per year for the full period of this study (1987 to 2017) and contribute more than 1/2 percentage point to US real GDP growth during the last ten. All told, our more complete accounting of innovations is (conservatively) estimated to have moderated the post-2007 GDP growth slowdown by nearly .3 percentage points per year.
    Keywords: Consumer Digital Services ; Consumer Durables ; Consumer Surplus ; Digital Transformation ; Information And Communication Technology ; Ict ; Price Measurement ; Productivity
    JEL: L86 L16 D13 O33 O47
    Date: 2019–06–27
  3. By: Prachi Agarwal (United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) South and South-West Asia Office)
    Abstract: This paper analyses the current development in trade in services in South Asia. South Asia’s language heritage, strong traditions of higher education, computer savvy diaspora and embrace of modern telecom infrastructure, have all contributed to services being a large part of the region’s GDP, with an increasing contribution to their export baskets. Countries in South Asia have formulated aggressive policies to promote the development of trade in services, with a focus on Information Technology and Communication, Professional services, Tourism and Travel, and Healthcare services. It was found that each country in the region has targeted specific niche markets to develop and to increase global exports and outreach. While some countries have formulated ‘Vision Documents” for their economy, others have devised specialized programs for “Priority Sectors”. This study divides the general policy themes under specific categories: (i) Skill development programs, (ii) nation-wide connectivity and digitization plans, (iii) initiatives to boost technology and entrepreneurship, with a focus on start-ups and intellectual property rights (IPRs), (iv) and export and brand promotion policies. This paper then highlights the best practices in the region and provides recommendations to develop a more competitive services sector. This research was undertaken to obtain an in-depth analysis of current policy making to promote the development of services for domestic and trade purposes, as well as assessing the impact of these policy tools. Such findings were primarily based on desk-based research from publicly available information sources combined with discussions with key stakeholders as well as an informed interpretation of the findings.
    Keywords: IT industry, South Asia, Trade in services, Trade policy
    JEL: F13 F14 L88 N75
    Date: 2019–07

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