nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2020‒12‒14
thirteen papers chosen by
Marek Giebel
Universität Dortmund

  1. Skilled Scalable Services: The New Urban Bias in Economic Growth By Fabian Eckert; Sharat Ganapati; Conor Walsh
  2. Employers’ Skills Requirements in the Austrian Labour Market: On the Relative Importance of ICT, Cognitive and Non-cognitive Skills over the Past 15 Years By Sandra M. Leitner; Oliver Reiter
  3. The Impact of ICT on Working from Home: Evidence from EU Countries By Jerbashian, Vahagn; Vilalta-Bufi, Montserrat
  4. ICT and capital biased technical change By Timothy DeStefano; Richard Kneller; Jonathan Timmis
  5. Capital incentives in the age of intangibles By Timothy DeStefano; Nick Johnstone; Richard Kneller; Jonathan Timmis
  6. Taxing Goods and Services in a Digital Era By David R. Agrawal; William F. Fox
  7. A digital agricultural advisory services platform to boost adoption of improved technologies and practices in Ethiopia By CGIAR Research Program on Policies, Institutions, and Markets (PIM)
  8. Cloud computing and firm growth By Timothy DeStefano; Richard Kneller; Jonathan Timmis
  9. Investigating the Internet in Greece: findings from the World Internet Project By Charalambos Tsekeris; Nicolas Demertzis; Apostolos Linardis; Katerina Iliou; Dimitra Kondyli; Amalia Frangiskou; Olga Papaliou
  11. Submarine cables, the internet backbone and the trade in services By Zouheir El-Sahli
  12. Framework Assessment And Index Of Knowledge Management Of Small Farmers In The Agricultural Area By , Veronice; , Helmi; , Henmaidi; Arif, Ernita
  13. Export under background risk: A mean-variance decision analysis for Indian manufacturing firms By Subhadip Mukherjee; Soumyatanu Mukherjee; Tapas Mishra

  1. By: Fabian Eckert; Sharat Ganapati; Conor Walsh
    Abstract: Since 1980, economic growth in the U.S. has been fastest in its largest cities. We show that a group of skill- and information-intensive service industries are responsible for all of this new urban bias in recent growth. We then propose a simple explanation centered around the interaction of three factors: the disproportionate reliance of these services on information and communication technology (ICT), the precipitous price decline for ICT capital since 1980, and the preexisting comparative advantage of cities in skilled services. Quantitatively, our mechanism accounts for most of the urban biased growth of the U.S. economy in recent decades.
    Keywords: urban growth, high-skill services, technological change
    JEL: J31 O33 R11 R12
    Date: 2020
  2. By: Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw); Oliver Reiter (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: This paper analyses job advertisements to identify the particular skills, abilities and characteristics that are in demand on the Austrian labour market. It takes a novel approach and uses information extracted from over 1.5 million job advertisements over the past 15 years from Austria’s largest online job portal,, to shed light on employers’ skills needs and the relative importance of, and demand for, different skill types over time. It develops a taxonomy which classifies observable skills into information and communications technology (ICT) skills (which are of increasing importance as a result of the ongoing digital revolution), cognitive skills, cognitively based skills and non-cognitive (soft) skills; but it also takes into account other factors that frequently appear in job advertisements, such as previous work experience, physical appearance, and the willingness to travel, work overtime, weekends or shifts, among others. It shows that Austrian employers are quite demanding cognitive skills, previous work experience and ICT skills were the three most frequent requirements, appearing in (almost) every second job advertisement in 2019. Over the years, these categories have also become increasingly important to employers. Among cognitively based skills, language skills were the most important, also appearing in every second job advertisement. The ability to work as part of a team, communication skills, independence, flexibility and accuracy were the top five non-cognitive (soft) skills demanded by employers.
    Keywords: Job advertisements, online job portal, skills requirements, ICT skills, cognitive skills, non-cognitive skills
    JEL: J23 J24 J63
    Date: 2020–12
  3. By: Jerbashian, Vahagn; Vilalta-Bufi, Montserrat
    Abstract: We use data from 14 European countries and provide evidence that the fall in prices of information and communication technologies (ICT) is associated with a significant increase in the share of employees who work from home. Similar results hold within age, gender, and occupation groups. There are notable differences across age groups, however. The effect of the fall in ICT prices on working from home increases with age. A rationale for such a result is that the preference for working from home increases with age.
    Keywords: Working from Home,ICT,Age,Gender,Occupations
    JEL: J23 J24 O33
    Date: 2020
  4. By: Timothy DeStefano; Richard Kneller; Jonathan Timmis
    Abstract: Historical analysis of past general purpose technologies suggest that multi-factor productivity gains are realised through both labor and capital saving features from these technologies. In this paper, we explore for the first time whether ICT leads to capital saving, generated by squeezing a greater amount of economic activity into a smaller amount of space. To do so we use new regional data on building capital for the UK and cross-space and time variation in broadband connection speeds over an 18 year period. We find evidence of capital biased technical change, where the long-term effects of ICTs are linked to a reduction of the geographic footprint of businesses and these results are robust to wide-ranging robustness, falsification and endogeneity bias tests. The capital biased technical change effects of ICT provide a new perspective on the recent discussion about the ‘death of the high street’ and, as this type of capital is typically assumed to be constant, likely represents an aspect of TFP missing from estimates constructed at both the micro and macro level
    Keywords: ICT; technical change; general purpose technology
    Date: 2020
  5. By: Timothy DeStefano; Nick Johnstone; Richard Kneller; Jonathan Timmis
    Abstract: Cloud computing presents a significant change in the way firms access digital technology and enables data-driven business models. Now, firms can acquire their storage, processing and software needs as a cloud computing service rather than making upfront fixed cost investments in capital. Yet, policies that encourage digital diffusion are still targeted towards investment in physical IT capital. This paper exploits a UK tax incentive for capital investment to examine firm adoption of cloud computing and big data analytics. Using a quasi-natural experimental approach our empirical results show that the policy increased investment in IT capital and hardware as one would expect; but it reduced the adoption of cloud and big data analytics. The adverse effects of the policy on cloud and big data adoption are particularly pronounced for small firms.
    Keywords: ICT, cloud computing, big data analytics
    Date: 2020
  6. By: David R. Agrawal; William F. Fox
    Abstract: Taxing consumption in the digital economy poses unique challenges for fiscal authorities. Recent institutional reforms, such as states changing remittance rules for the sales and use tax following the Supreme Court decision in South Dakota v. Wayfair, were enacted in order to increase tax revenue collections and create a more neutral tax system. Although these reforms induced more remote vendors to remit taxes on a destination basis, the revenue gains were modest, consistent with most large online vendors remitting taxes prior to the reforms. Instead, following the recent large shock to online shopping from the Covid-19 pandemic, the shift to destination-based taxation has redistributed revenues between large and small local jurisdictions. Increased online shopping raises revenue growth in small jurisdictions while contracting revenues in large jurisdictions. But, Wayfair is not the end of the story: technological changes that induce new consumption patterns, promise new challenges for fiscal authorities. Critical challenges for the next decades include limiting administrative and compliance costs of enforcing taxes in a digital world, determining filing thresholds, dealing with online marketplaces and facilitators, and taxing the consumption of digital services from two-sided platforms. With respect to digital services, we discuss whether consumption taxes should be imposed on both monetized platforms and non-monetized platforms such as social media, and the mechanisms for doing so.
    Keywords: sales tax, e-commerce, online shopping, enforcement, compliance, South Dakota v. Wayfair, consumption tax, digital services, platforms
    JEL: H20 H70 K30 L80 R50
    Date: 2020
  7. By: CGIAR Research Program on Policies, Institutions, and Markets (PIM)
    Abstract: Despite a rapidly growing enthusiasm for the use of information and communications technologies (ICTs) in developing country agriculture, many questions remain on the effectiveness of ICT-based approaches. In the case of Ethiopia, an IFPRI-led and PIM-supported study highlighted the benefits of a large-scale video-mediated approach for agricultural advisory services. The Government of Ethiopia used these results to make a significant investment in digitizing agricultural advisory services.
    Keywords: ETHIOPIA, EAST AFRICA, AFRICA SOUTH OF SAHARA, AFRICA, agricultural extension, advisory services, digital technology, Information and Communication Technologies
    Date: 2020
  8. By: Timothy DeStefano; Richard Kneller; Jonathan Timmis
    Abstract: Cloud computing enables a shift in the costs of ICT adoption from investment in fixed capital to pay-on-demand services allowing firms to scale and reorganize. Using new firm-level data we examine the impact of cloud on firm growth, using zip-code-level instruments of the timing of high-speed fiber availability and speeds. Cloud leads to the growth of employment and revenue for young firms, but they become concentrated in fewer establishments. For incumbents, we find smaller scale effects but dispersed activity through closing establishments and moving employment farther from the headquarters. Moreover, cloud adoption leads to worker relocation across establishments within firms.
    Keywords: firm growth; the cloud; ICT use; employment; productivity
    Date: 2020
  9. By: Charalambos Tsekeris; Nicolas Demertzis; Apostolos Linardis; Katerina Iliou; Dimitra Kondyli; Amalia Frangiskou; Olga Papaliou
    Abstract: The present study aims to offer a comprehensive presentation of the empirical results of the third wave of the World Internet Project (WIP) nation-wide survey in Greece, which was conducted from the 12th of April to the 23th of May 2019. It involves the main findings of this research wave and explores the development of internet penetration among the Greek population by providing comparative data on several aspects of the respondents’ internet-related behavior between all three WIP waves (2015, 2017, 2019). These aspects pertain to digital use, access and divides, online activities and social capital, internet reliability and fake news, online victimization and privacy, political efficacy and freedom of expression. Data were collected by 1,208 interviews over the phone on a structured questionnaire (based on WIP guidelines and included some additional national questions of theoretical interest) and manually transferred to an online platform using RM+ software and then to statistical analysis software. The paper also offers descriptive presentations of the results analyses as well as charts including mostly relative frequencies and, in some cases, variable means. The relative frequencies and means are included in the charts in order to allow the reader to have a clear overview of the exact percentages. The results depict Greece as a digitally vulnerable society, with strong internal antinomies, which are in tandem with internet’s radical ambivalence in general.
    Keywords: World Internet Project-Greece, Internet Use, Digital Divide, Disinformation, Social Media, Social Capital
    Date: 2020–11
  10. By: Jean-Charles Pillet (HEC Lausanne - Faculté des Hautes Etudes Commerciales (HEC Lausanne)); Kevin Carillo (TBS - Toulouse Business School); Claudio Vitari (AMU - Aix Marseille Université); Federico Pigni (GEM - Grenoble Ecole de Management)
    Abstract: The digital era is characterized by the widespread diffusion of information technologies (IT) offering great degrees of malleability in how their features may be interpreted and used. While there are immediate advantages to leveraging the malleability of IT, this could also prove a source of confusion for lay users who are faced with multiple interpretations of what IT can do. Despite growing evidence of this phenomenon, current research lacks the concepts and tools to adequately capture its impact on IT acceptance, adoption, and use. In this paper, we first deploy the "perceived functional ambiguity" (PFA) construct, describing its dimensionality and relationships with measures. Then, we develop and validate the corresponding multidimensional measurement instrument. Finally, we test the effect of the construct across three studies assessing how users perceive social media (N=419), smartphones (N=411) and smart speakers (N=346). Our results suggest that ambiguity has a double-edged sword effect on users' perception of IT: greater levels of ambiguity are associated with greater utilitarian and hedonic value, but they also entail substantial learning costs. This research contributes to advancing our theoretical understanding of IT use by introducing ambiguity as a factor underpinning contemporary IT use.
    Keywords: ambiguity,user perception,technology acceptance,multidimensional constructs,scale development
    Date: 2020–06–15
  11. By: Zouheir El-Sahli
    Abstract: Submarine cables are undersea digital bridges that allow ideas and information to move across space. Submarine cables are expensive infrastructure investments and their high costs raise the question about their economic returns, especially in developing countries. Specifically, it is not known what laying submarine cables means for services trade which depends heavily on exchanging ideas and information. Using a novel data set for connecting the world countries by submarine cables, this study considers the variation in the cross-country variation in the number of submarine cables as well as the timing of connection to identify the effects of submarine cables. To deal with endogeneity, two novel instruments are developed. The results confirm that submarine cables stimulate services trade in some sectors. Benefits to developing countries are higher where more sectors expand their services trade and no sectors lose. This suggests a catch-up effect and higher gains from laying submarine cables in developing countries.
    Keywords: Submarine cables, services trade, developing countries, infrastructure
    Date: 2020
  12. By: , Veronice; , Helmi; , Henmaidi; Arif, Ernita
    Abstract: Knowledge Management (KM) in agriculture is an establishing system for creating, documenting, classifying, and disseminating knowledge, required for synergy of the development of technological innovation dissemination. KM framework requires assessment as a basis for the KM system in agricultural areas as efforts to determine the effectiveness of the system need to have a KM index which serves to represent conditions in the field. This study aims to determine the framework and KM index of small farmers in agricultural areas. Also, evaluating it as a basis for KM systems requires framework assessment in agricultural areas; therefore, the effectivity determination requires a KM index which represents the conditions in the field. The design process uses a Delphi method through the stages, as well as in-depth interviews with 15 experts, observations, and Focus Group Discussion. The result reveals the form of KM index measurement variables within agricultural areas. First, acquisition with indicators of all group member participation in all related activities. This process occurred within and outside the organisation, using a systematic approach. Second, storage with signs of knowledge access owned by all members, which are easily traceable and digitally stored, as well as the existence of information security mechanism. Third, distribution with indicators source, material clarity, and the delivery methods used. And fourth, application with indicators of precise regulation, utilising information technology. The average index results based on the reference of American Productivity and Quality Center (APQC)'s level of Knowledge Management Maturity KM obtained level 3 which is standardisation with the dominant indicator being the acquisition indicator. This study concludes the KM framework in the agricultural area has four variables, and the km level index is at level 3.
    Date: 2019–11–28
  13. By: Subhadip Mukherjee; Soumyatanu Mukherjee; Tapas Mishra
    Abstract: How would accessing foreign markets affect risk exposure of manufacturing firms? Producing for and selling specific goods to foreign markets (exports) require specialized attention. For example, manufacturing firms are exposed to idiosyncratic shocks in their global supply chains, such as exchange rate volatility, asset market frictions, transaction risks, credit tightening, and so on. Given this background, we probed production and exporting decision for a manufacturing firm (that serves both domestic and foreign markets) in the context of firm-specific and industry-specific shocks on trade, with a view of searching for optimality. These shocks are aggregated to form a type of risk that literature labels as ‘non-hedgeable’ background risk. We also propose that background risk is dependent on direct (endogenous) risk pertaining to fluctuations in the spot/nominal exchange rates. To test for potential optimal conditions, we employ a mean-variance decision-theoretic modelling approach. This approach was selected in order to trace out the comparative static responses of optimal export sales following the changes in the distribution of background risk or due to the dependence structure between the two sources of risks (i.e., background risk and exchange rate risk). Our contribution includes isolating all comparative static effects of these changes in the context of optimal production and exporting decisions. In particular, we consider the relative trade-offs between risks and returns, and offer intuitive economic theory-based interpretations of our results. In order to demonstrate robustness of the key results in our model empirically, we utilised an unbalanced panel data of 1,273 exporting Indian manufacturing firms over the time period of 1996-2017 to perform a structural estimation of our theoretical model. This model is derived using a flexible utility function that incorporates all possible options of risk preferences. Through this approach, we are able to estimate risk aversion elasticities specific to our context.
    Keywords: ICT; firm growth; cloud computing
    Date: 2020

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