nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2019‒11‒11
twenty papers chosen by
Marek Giebel
Universität Dortmund

  1. A Cross-Country Analysis of ICT: Diffusion, Economic Growth and Global Competitiveness By Banerjee, Aniruddha; Rappoport, Paul; Alleman, James
  2. Determinants of Mobile Broadband Use in Developing Economies: Evidence from Sub-Saharan Africa By Hasbi, Maude; Dubus, Antoine
  3. University Postgraduate Research Programmes: Digitization(ICT),Innovations and Applications By NWAOBI, GODWIN
  5. High-Speed Internet, Financial Technology and Banking in Africa By Angelo D'Andrea; Nicola Limodio
  6. Why do cloud providers prefer renting to selling? A supply side perspective By Fujisawa, Chieko; Kasuga, Norihiro
  7. Internet of Things and the network economics of operator platforms By Knieps, Günter
  8. Business opportunities in 5G mobile technology By Nyström, Anna-Greta; Gugenishvili, Ilia
  9. "Geo-Political Economy & Culture" and Connected Life in Asian I&CT Markets By Kawamata, Takahiro
  10. The impact of mobile technology on economic growth: global insights from 2000-2017 developments By Bahia, Kalvin; Castells, Pau; Pedrós, Xavier
  11. The Effects of Social Media Use on the Well-Being of Users. The Wonderland of HaikuJAM By Andrén, Daniela
  12. Tangible and Intangible Assets in the Growth Performance of the EU, Japan and the US By Amat Adarov; Robert Stehrer
  13. Information and Communication Technology (ICT) and Technological Capacity: A Regression Analysis on Some European and Emerging Countries By Maliki, Samir; Sour, Ouieme
  14. Analysis of the WiFi4EU initiative as a potential instrument to correct digital divide in rural areas in the EU By Navío-Marco, Julio; Pérez-Leal, Raquel; Ruiz-Gómez, Luis Manuel
  15. Use of Whatsapp for flexible learning: Its effectiveness in supporting teaching and learning in Sierra Leone's Higher Education Institutions By Jackson, Emerson Abraham
  16. Media Repertoires of Japanese Old Users in the Digital Media Environment By Takemura, Tomoko
  17. Digitalisation in the lives of urban migrants: Evidence from Bogota By Martin-Shields, Charles; Camacho, Sonia; Taborda, Rodrigo; Ruhe, Constantin
  18. Innovation ecosystems in small countries – The case of Luxembourg By Binsfeld, Nico; Whalley, Jason
  19. Driver and Barriers of ICT Adoption in Revenue Collection in Ghana: A Case of Accra Metropolitan Assembly By Tahiru, Fati; Agbesi, Samuel
  20. Competition, technological change and productivity gains: the contribution of information technologies By Ciriani, Stephane; Jeanjean, Francois

  1. By: Banerjee, Aniruddha; Rappoport, Paul; Alleman, James
    Abstract: Forty years ago, virtually the entire telecommunications sector was state owned, managed and controlled - owned, managed and controlled by the state since their inception. In the mid-1980s a movement towards privatization, liberalization and deregulation took hold. Now the sector has been privatized in most countries and subjected to regulatory reform. The major reform occurred in the late 1990s (Estache et al. 2006). Since then the internet and cellular-mobile industries have advanced significantly. Mobile service has exploded, particularly, in the developing world. This has changed the dynamics of the industry dramatically. The paper updates and expands the research on the contribution of Information and Telecommunications Technology's (ICT) on the growth of Gross Domestic Product (GDP) using cross-country analysis of selected countries. It follows the framework of Czernich (1991), et it use of instrumental variables and Farhadi, et al. (2012) in its use of International Telecommunication Union's (ITU) ICT Development Index (IDI) but enhances the analysis by use of Global Competitiveness Index (GCI) and more recent data. It also uses the Conference Board Total Economic Database. This paper empirically evaluates the impact of ICT on economy growth in selected countries and vice versa. For the 2008-2017 period, it shows lack of evidence causality in both directions. This finding is in contrast to results obtained looking at earlier periods. A central question is, if these results hold going further, what changed? The paper is organized as follows: A brief Literature Review following this Introduction/Overview. It reviews the economic literature of Information and Telecommunications Technology's (ICT)impact on economic growth and development. The third section describes the data. The fourth section describes the methodology and; the results are in the fifth section. The final section presents Future Research and Remaining Questions.
    Date: 2019
  2. By: Hasbi, Maude; Dubus, Antoine
    Abstract: Broadband is seen as a vector of economic growth and social development. In the developing world, mobile technologies are widely adopted and mobile broadband is progressively rolled-out with high expectations on its impact on the countries' development. We highlight what the determinants of mobile broadband use are in four Sub-Saharan countries. Using micro-level data coming from household surveys over 5 years, from 2013 to 2017, we show that the ownership of a mobile phone is highly correlated with mobile broadband use. We also show that for non-mobile owners, the ownership of an active SIM card is a prerequisite for using mobile broadband. In addition, mobile money users tend to be more likely to use mobile broadband. This could highlight the existence of a learning effect. By using mobile money services, individuals gain more experience and are more inclined to use more advanced technologies, such as mobile broadband. Although we show that mobile broadband use is increasingly growing, a large part of the population, mainly composed of poor households living in rural areas, is still left behind. This raises concerns on the increase of the digital gap between people and territories.
    Keywords: Mobile Broadband Use,Developing Economy,Economic Growth,Inequality,Digital Gap
    JEL: I30 O12 L50 L96 O55
    Date: 2019
    Abstract: Without advanced educational research, development will not occur and only technologically educated people can command the skills necessary for sustainable growth and development. However, the current generations of university postgraduate students are ushering in a new paradigm for research. Here, collaboration is made much easier, sharing of research knowledge is instant and the resultant synergies yield huge advances in research productivity and innovation. Therefore, this paper argues that ICT integration and digitization process will help university postgraduate (research) programmes to remain the same while at the same time is influencing it, determining and changing it. And giving that technological change is continuous and frequently disruptive, educational (research) policy planning should be dynamic and integrated within the framework of ecosystem innovation hub.
    Keywords: Digitization, ICTs, University, Research, Postgraduate- programmes, Innovation, TechHub, Nigeria, Africa, Incubation, Internet, Education, Knowledge, Information Networks, Technology, Infrastructures
    JEL: A20 A23 C80 C88 D8 I2 I23 O3 O31 O32 O33
    Date: 2019–10–28
  4. By: Inna S. Lola (National Research University Higher School of Economics); Murat Bakeev (National Research University Higher School of Economics); Anton Manukov (National Research University Higher School of Economics)
    Abstract: This paper presents the results of measuring cross-sectoral economic and technological effects, allowing to determine the degree of dependence between the segments that produce digital technologies and implement them. The basis for empirical calculations was the survey data of leaders among Russian IT companies and retail organizations on the current state of digital and business activity. The purpose of the work is to identify the presence and establish the strength of the relationship between these segments in terms of existing localized industry effects, expressed in the transfer of technology from the IT segments to retail. The authors of the work identified and tested several specific hypotheses, the general meaning of which was to suggest that retail trade in the current stage of economic development in Russia is susceptible to emerging trends in the rapidly changing IT services sector that can quickly and efficiently respond to the growth of the IT companies digital activity by increasing investments in digital technologies and increasing the intensity of their application in business processes. In particular, hypotheses were tested regarding the impact of business activity in the IT services segments on the growth of electronic commerce turnover, the use of online marketplaces, Big data technologies, virtual and augmented reality technologies in retail trade organizations, as well as hypotheses suggesting a connection between the development of mobile applications in the IT segments and the use of mobile technologies, expectations regarding the growth of electronic goods turnover in retail organizations. The obtained results confirmed the majority of the hypotheses put forward, thereby supporting the authors' general assumption about the existence of specific effects of the development of the IT segments on intersectoral technological transfers, revealed the existing specifics of penetration and spread of modern technological trends in trade, and also showed that the IT is currently important component in the process of digital transformation of Russian retail trade organizations.
    Keywords: digitalization, digital technologies, IT segment, retail, cross-sectoral connections, conjuncture observations
    JEL: L81 L86 O33
    Date: 2019
  5. By: Angelo D'Andrea; Nicola Limodio
    Abstract: This paper provides empirical evidence on the effect of high-speed internet on financial technology and banking in Africa. Our test combines data on 551 banks and 28,171 firms with the staggered arrival of fibre-optic submarine cables in Africa. High-speed internet promoted private-sector lending by banks, and credit and sales by firms. These results are consistent with an extensive adoption of financial technologies, like real-time gross settlement systems (RTGS), lowering transaction costs in African interbank markets. We find that liquidity management considerably changed for banks being weak interbank users prior to high-speed internet. In fact, such banks lowered their internal liquidity hoarding by 10%, increased interbank transactions by 40% and expanded lending by 37%. Analogously, firms in countries with weak pre-existing interbank markets presented stronger effects at the cable arrival. These results are consistent with high-speed internet promoting financial technology adoption, liquidity and credit.
    Keywords: Fintech, Banking, Investment, Financial Development
    JEL: G2 G21 O16 O12
    Date: 2019
  6. By: Fujisawa, Chieko; Kasuga, Norihiro
    Abstract: Expansion of the cloud computing market, a major reform in information and communication technology (ICT), has attracted wide attention. From the perspective of companies that need cloud services, if access to cloud spreads is available on rent instead of sales, initial investment cost will decline and the number of companies currently adopting the cloud system in the form of renting servers will increase. From the supply side perspective, what are the advantages of renting cloud services? To analyze this question, we consider a duopoly cloud market under licensing and examine the optimal strategy for providers. We find that in a two-part licensing contract, which includes high royalty and fixed fee charged upfront, when the cost-saving effect is high, both firms prefer renting to increase their revenue, but when the effect is low, each firm makes a different choice.
    Keywords: Durable goods,Licensing contract,Selling,Renting,Cloud market
    JEL: D43 L13 L68
    Date: 2019
  7. By: Knieps, Günter
    Abstract: Disruption of tradition network industries and the emergence of innovative physical operator platforms provide challenging governance problems of contractual relationships among different actors involved. The problem solution competence of operator platforms (two-sided, multi-sided) is the entrepreneurial search for the required governance structures. Operator platforms need as input a combination of physical networks and network services with complementary (big data) virtual networks. The problem of division of labor between all-IP broadband network providers, virtual network service providers and platform operators arises concomitant with the implementation of adequate governance structures.
    Keywords: Internet of things,operator platforms,governance,sharing economy
    JEL: L51 L92 L96 O31
    Date: 2019
  8. By: Nyström, Anna-Greta; Gugenishvili, Ilia
    Abstract: The question of how actors perceive business opportunities has puzzled both researchers and practitioners for decades. In the era of artificial intelligence, machine learning, and the Internet of things, many actors of the technology-intensive industries question how to use new technology to create value, and how to monetize new service concepts. In this paper, we focus on the next mobile communications technology, 5G, as one of the potential value-creators for the future that holds business opportunities for its utilizers and deployers. The concept of business opportunities is strongly associated with research on entrepreneurship (cf. Carlsson et al., 2003). Entrepreneurial opportunities consist of a set of ideas, beliefs, and actions that enable the introduction of goods, services, raw materials, and organizing methods in the absence of current markets for them (Sarasvathy et al., 2003). The research stream of entrepreneurial opportunities (cf. Alvarez & Barney, 2007, 2010; Dimov, 2007, 2011; Eckhardt & Shane, 2003) can offer new insights into the development of opportunities in high technologyintensive fields, and especially as regards the development of 5G. Strategies for opportunity identification, exploitation, and value creation are vital in the 5G era, as non-ICT traditional business sectors begin to deploy wireless technologies (e.g., factories, automotive, etc.). Researchers expect that 5G will change the business models and business ecosystems; it will also better address the evolving needs of customers (cf. Kliks et al., 2018). Unlike already existing mobile communications systems, 5G allows integration of vertical industries, e.g., energy, media, health, factories, and the automotive industry (5G-PPP, 2016). Thus, specialized companies will be able to provide services and establish positions in the value chains and actor networks. This is a major transformation compared to an environment dominated by bilateral relationships between mobile operators and their customers...
    Date: 2019
  9. By: Kawamata, Takahiro
    Abstract: Since the East Asian Miracle report was published by the World Bank in 1993, East Asian countries have achieved economic development with the "flying geese pattern" respectively, as well as advancements in informatization based on each political and cultural context. In particular, the revolution in information and communications technology (I&CT) drives commercial and social usage of the Internet throughout multiple devices such as personal computers, tablets, and smart-phones. East Asian cultural contexts thereby create commonalities over their territories, and maintain their distinctive characters as well. While telecommunications and media industries are under governmental control, with government regulations in most Asian countries, platform businesses, such as social network services (SNSs) have expanded across borders, demonstrating the principle of network externality and economy. In addition, cultural and/or social contents easily expand with identity and universality as high culture and with popularity as pop- and/or sub-cultures among younger generations within areas. This paper examines the potential of East and South East Asian markets including not only China, Korea, and Japan, but also Taiwan, Hong Kong, and Singapore, for mobile and wired communications, their technologies, services, content, and applications. It also describes the dynamism of networking among interested players over the next generation of information and communication technologies and their applications, such as SNSs and "FinTech", including mobile payment and e-commerce, as well as content including audio and visual content, and game software; in the context of the "Ecosystem" of I&CT business and the path-dependency of social shaping of technological trajectories as enhanced in each political and cultural territory. There may be a dramatic change occurring in the structure of the industry affecting not only telecommunications network components, terminal equipment vendors and software developers, but also network operators and service providers located in Asian territories. Therefore, our analysis places emphasis on the dynamic formulation of multi-tiered and multifaceted frameworks of "Geo-Cultural Informatics," which encapsulates the geo-politics and geo-economics associated with cultural informatics, within industrial clusters over Asian marketplaces...
    Keywords: Evolution of Technology,Ecosystem of industries,Geo-political economics,"Geo-cultural informatics",Path dependence of technology and institution,Social Networking Service (SNS),FinTech,Trust-based areas
    Date: 2019
  10. By: Bahia, Kalvin; Castells, Pau; Pedrós, Xavier
    Abstract: The last two decades have seen a lot research devoted to understanding the economic impact of telecoms infrastructure; however, the explosion of mobile technology, especially in the last decade, has received much less attention. This study addresses important evidence gaps by considering the impact of different mobile technologies on economic growth and also assessesing whether mobile has an additive impact when fixed broadband is in place. Applying IV and DPD models, our results show that during the 2000-2017 period, a 10% increase in mobile penetration raises GDP per capita by 0.59- 0.76%, over and above the impact of fixed broadband. Disentangling mobile's average impact, we find a 10% increase in 2G mobile connectivity increases GDP per capita by 0.37-0.81%, while mobile broadband generates an additional impact of 0.12-0.72%. Our analysis suggests the magnitude of returns on mobile infrastructure upgrades does not diminish: mobile technology's impact is statistically on par with that of fixed broadband, and mobile broadband's average impact is also aligned with that of 2G connectivity. Moreover, the analysis shows that mobile's impact increases with a country's skills and with labour and capital from the services and industry sector, meaning there are important complementarities with mobile as a general purpose technology.
    Keywords: ICT,Mobile broadband,Economic growth,Instrumental variables
    JEL: F62 O11 O33 O47
    Date: 2019
  11. By: Andrén, Daniela (Örebro University School of Business)
    Abstract: Internet usage in general and social networking platforms (SNPs) in particular have dramatically changed the way we spend our time. A relevant question is how this change in time-use affected the well-being of people in general and younger people in particular. We answer this question by reporting, for the first time, detailed information about time-use in SNPs and the well-being of Jammers, the users of HaikuJAM (HJ), a mobile app that aims to boost emotional well-being using collaborative writing techniques. HaikuJAM is output-dependent. Our explorative analysis finds that Jammers who spent most of their SNP time in HJ have, on average, a slightly higher level of both life satisfaction and other domain satisfactions (especially satisfaction with family and friends) than the other Jammers. They also have a few sociodemographic characteristics that are statistically significant different from the other Jammers (i.e., they are slightly older and more of them work and are married). Predominant Jammers also have higher expectations about the importance of the use of HaikuJAM for their well-being and their personal development. Our results suggests that the app features attract a specific group of users who have a relatively high level of satisfaction with their life in general and with their family and friends, in particular. It is quite possible that creative individuals who might be introverts and/or are lonely are using HaikuJAM not only to write but also to connect with other individuals who like to write. Despite the fact that our analysis is largely exploratory, our results suggest a few possibilities to addresses the causality between users’ time spent in a SNP and their well-being.
    Keywords: well-being; life satisfaction; social networking platform; social media; communit; time-use; collaborative writing; poetry; haiku; HaikuJAM App; Jammers; predominant Jammers.
    JEL: A12 D60 I31
    Date: 2019–11–05
  12. By: Amat Adarov (The Vienna Institute for International Economic Studies, wiiw); Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: This paper discusses new results using the EU KLEMS 2019 Release focussing on the role of ICT and intangibles assets employing a growth accounting framework and an econometric analysis. The EU KLEMS 2019 data covers most EU Member States, the US and Japan, forty detailed industries according to NACE Rev. 2 (ISIC Rev. 4) along with nine aggregated industries and spans over the period 1995-2017. In particular, intangible assets outside the boundaries of the national accounts are taken into account. The data are used to study total factor productivity, labour and capital productivity developments in a comparative cross-country and cross-industry dimension with an emphasis on the role of capital investments. Inter alia, the analysis studies the implications of various asset types and particularly the role of ICT and intangible capital, as well as changes in labour services and the composition thereof, as drivers of value added and labour productivity growth. Significant differences in the underlying growth contributions between the pre-crisis and post-crisis periods in growth performances are highlighted. Disclaimer A comparative analysis based on the EU KLEMS Release 2019 The paper is written as part of the project ‘Industry level growth and productivity data with special focus on intangible assets’ under the Service Contract No. ECFIN-116-2018/SI2.784491 financed by the European Commission, DG ECFIN. We would like to thank Dale Jorgenson and participants of the Asian KLEMS conference (14-15 October 2019, Bejing) for useful comments.
    Keywords: EU KLEMS, growth accounting, tangible and tangible assets, ICT and non-ICT capital, productivity and growth
    JEL: C82 D24 O47
    Date: 2019–10
  13. By: Maliki, Samir; Sour, Ouieme
    Abstract: The aim of this article is to analyses technological capacity and the role of the Information and Communication Technology (ICT) in the case of ten European and Emerging countries. We introduce some variables to test the innovation as a dependent variable to capture the appropriate regression model for the period 2008-2016. The fixed effect model confirms the positive relationship between the technological capacity and ICT as proxy variables. Also, the results show that the Exports of High Technology products as a share of total exports in countries of the sample is not significant for that period.
    Keywords: Information and Communication Technology,Technological capacity,Emerging countries-European Countries
    Date: 2019
  14. By: Navío-Marco, Julio; Pérez-Leal, Raquel; Ruiz-Gómez, Luis Manuel
    Abstract: With the WiFi4EU initiative, the European Commission intends to reinforce local wireless Internet connectivity free of charge and without discriminatory conditions in the EU. This paper aims to analyse if this policy measure achieves its goals: to contribute towards digital inclusion and to improve coverage in disadvantaged areas. By analysing the results of the first call, we can conclude that WiFi4EU can be a good tool for promoting the necessary connectivity in local/rural environments of the European Union, but there is room for improvement to increase the positive impact of the initiative. The article proposes useful recommendations for municipalities and policymakers, and suggests improvements for the award procedure.
    Keywords: WiFi4EU,ICT regulation,Gigabit Society,Rural connectivity,digital divide
    Date: 2019
  15. By: Jackson, Emerson Abraham
    Abstract: Despite its inherent limitations, Whatsapp messenger has proved beneficial in bridging the gap in technology provision for enhancing students' learning experiences in Sierra Leone. The need to make sure students dedicate time in using Whatsapp for the benefit of improving their learning experiences was emphasised; this as suggested can be done through participation in group collaboration, which involve peer-to-peer and peer-to-instructor interaction. Equally, to advance effective use of flexible learning opportunities, institutions must consider alternatives like Moodle / Blackboard, which already comes with the added capabilities of MIS synchronisation features of integration with students' record. In all of the aforementioned points, there is a need for government support in ensuring the right investment is made in bringing the country's HEIs integrated ICT learning provision to international standard.
    Keywords: Whatsapp; Alternative Platforms; Flexible Learning; Qualitative; Sierra Leone
    JEL: I29
    Date: 2019–06–12
  16. By: Takemura, Tomoko
    Abstract: The purpose of this study is to explore media repertoires emerging from Japanese old media users and factors which can explain the use of different media repertoires to understand a new digital divide called "gray divide," the inequality in the access to and use of ICT within senior citizen sector. Data of this study was based on the Public Opinion survey "The Japanese and Television 2015" conducted by NHK Broadcasting Culture Research Institute. Gender, education, and age were the most powerful predictors of media use repertoires. This finding advances our understanding of the relationship between media use repertoires and influential factors.
    Date: 2019
  17. By: Martin-Shields, Charles; Camacho, Sonia; Taborda, Rodrigo; Ruhe, Constantin
    Abstract: As increased migration, particularly to urban centres, and digitalisation play a greater role in development cooperation, more research on how these phenomena interact will become critical. Information communication technologies (ICTs) offer pathways for potentially making it easier for migrants to settle in, whether it be through e-government programmes or by accessing social networks that can help in finding housing and work. To better understand how ICTs fit into urban migrants' lives, we gathered new survey data in Bogota comparing how long-term residents, short-term residents, and Venezuelan migrants access and use ICTs. We identified a new factor that influences internet access among migrants after controlling for economic and social factors: duration of time in a neighbourhood. While migrants initially lag behind their neighbours in ICT and internet access, the longer they stay in one neighbourhood, the more likely they are to gain access to these technologies. Indeed, over time, our data shows that migrants become more likely than their neighbours to gain access to ICTs and the internet when they continue to stay in the same neighbourhood. Our results also show that uptake of e-government services remains a challenge. Citizens generally do not interact with their governments more than a few times a year, and migrants may not interact at all. Especially when working with vulnerable or "hidden" populations, development organisations need to put significant resources into education and outreach so that the populations they are trying to reach know about e-government services, and their value. The data collected in Bogota paints a potentially positive picture about using ICTs with migrants and migrant communities. By effectively engaging migrants early on and meeting basic initial needs such as housing or access to identification, development and humanitarian agencies could help migrants gain greater access to ICTs and make use of e-government platforms.
    Keywords: Migration,Digitalisation,E-government,Colombia
    Date: 2019
  18. By: Binsfeld, Nico; Whalley, Jason
    Abstract: Since it emerged at the start of the decade, the ecosystem model of Martin Fransman (Fransman, 2010) has been widely applied to understand innovative processes within the information and communication technology (ICT) sector - see, for example, Binsfeld, Whalley, & Pugalis (2017b). The framework has recently been updated (Fransman, 2018) so that an innovation ecosystem is defined as "of a group of interdependent players and processes who together through their interactions, make innovation happen". He has also proposed a deeper examination of the dynamics of how innovation happens within innovation systems, and who is in charge of making innovation happen. This paper seeks to apply this evolved understanding of innovative processes to Luxembourg. More specifically, the paper will describe and comment about the evolution of the ICT ecosystem in recent years. The paper will also present and reflect on a series of recent government initiatives that have been launched with the intention of stimulating the development of the ecosystem. Through such an approach, we will demonstrate the pivotal role played by the government as the main driver behind innovation in the ecosystem. The paper also outlines Luxembourg's national skills strategy and explores the degree to which these various initiatives may be integrated together.
    Date: 2019
  19. By: Tahiru, Fati; Agbesi, Samuel
    Abstract: Act 462 of 1993 and Act 936 of 2016 of the Local Government of Ghana delegates power to the District and Municipal Assemblies to formulate and execute plans, programs, and strategies to effectively mobilize resources necessary for the overall development of the district and to levy and collect taxes, rates, duties, and fees. Over the years, the Accra Metropolitan Assembly (AMA) has been trying to implement what the act states. However, the Assembly faces challenges of revenue collection, storage, and dissemination of information. The main purpose of this study was to examine the drivers and barriers to ICT adoption in the operations of AMA from macro level using institutional theory and organizational factors. The study adopted inductive qualitative thematic analysis using semi-structured interviews, and document analysis. The themes that emerged from the qualitative data analysis that influence AMA ICT adoption includes top management interest and attitude, infrastructure and resources, policy directive, and organizational success. The findings also identify themes such as government directives, and contractors commission as the main barriers to ICT adoption in AMA. The study concluded by making several recommendations that includes a centralized database that will serve as a repository for property informations as well as owners details.
    Keywords: AMA,MIS,ICT,Revenue,Tax,Ghana
    Date: 2019
  20. By: Ciriani, Stephane; Jeanjean, Francois
    Abstract: This paper addresses the empirical relationship between the level of competition and the rate of productivity growth across thirty sectors of the French production system during the period 1978- 2015. It shows that there exists an optimal level of competition for each sector that is defined by the mark-up that maximizes the growth rate of labor productivity. The information technologies Sectors have the highest mark-ups for maximizing productivity growth. The persistence of nonoptimal mark-ups in French sectors is associated with a 0.4% loss in aggregate average annual labor productivity growth during the period (1.86%). Hence, long-term productivity growth could have reached 2.25% if mark-ups had been at their optimal level. There is a strong significant positive correlation between the optimal mark-up and the rate of Hicks-neutral technical progress in each sector. This finding implies that sectors with high technical progress, as information technologies sectors, require higher mark-ups to maximize their rate of labor productivity growth. Overall, the aggregate economy would benefit from a decrease in the gap between nonoptimal and optimal mark-ups, as such an alignment would foster productivity growth.
    Keywords: Technical progress,productivity growth,mark-up
    JEL: O11 O31 O47 L16
    Date: 2019

This nep-ict issue is ©2019 by Marek Giebel. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.