nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2021‒01‒04
thirteen papers chosen by
Marek Giebel
Universität Dortmund

  1. Mums Go Online: Is the Internet Changing the Demand for Healthcare? By Sofia Amaral-Garcia; Mattia Nardotto; Carol Propper; Tommaso M. Valletti
  2. The Diffusion of Technological Progress in ICT By Steffen Elstner; Christian Grimme; Valentin Kecht; Robert Lehmann
  3. Privacy and antitrust in digital platforms By Nicholas Economides; Ioannis Lianos
  4. Zero Rating, Content Quality and Network Capacity By Emmanuel LORENZON
  5. Tax Challenges of the Digitalized Economy By David Hanrahan
  6. Banning Price Discrimination under Imperfect Competition: Evidence from Colombia's Broadband By Juan Sebastian Vélez-Velásquez
  7. The New Cybersecurity Landscape – How Are Finnish Companies Faring? By Mattila, Juri; Ali-Yrkkö, Jyrki; Seppälä, Timo
  8. Patent assertion entities and patent ownership transparency: strategic recording of patent transactions at the USPTO By Valerio STERZI
  9. IT Shields: Technology Adoption and Economic Resilience during the Covid-19 Pandemic By Nicola Pierri; Yannick Timmer
  10. How to Jump Start Vietnam's Economy? By Keiko Inoue; Jacques Morisset
  11. Profiting from big data analytics: The moderating roles of industry concentration and firm size By Elisabetta Raguseo; Claudio Vitari; Federico Pigni
  12. Misaligned Union laws? A comparative analysis of certification in the Cybersecurity Act and the General Data Protection Regulation By Kamara, Irene
  13. Working from home and the explosion of enduring divides: income, employment and safety risks By Armanda Cetrulo; Dario Guarascio; Maria Enrica Virgillito

  1. By: Sofia Amaral-Garcia; Mattia Nardotto; Carol Propper; Tommaso M. Valletti
    Abstract: We study the effect of internet diffusion on childbirth procedures performed in England between 2000 and 2011. We exploit an identification strategy based on geographical discontinuities in internet access generated by technological factors. We show that broadband internet access increased Cesarean-sections: mothers living in areas with better internet access are 2.5 percent more likely to have a C-section than mothers living in areas with worse internet access. The effect is driven by first-time mothers who are 6 percent more likely to obtain an elective C-section. The increased C-section rate is not accompanied by changes in health care outcomes of mothers and newborns. Health care costs increased with no corresponding medical benefits for patients. Heterogeneity analysis shows that mothers with low income and low education are those more affected: thanks to the internet, they progressively close the C-section gap with mothers with higher income and education. We show evidence documenting the growing importance of the internet as a source of health related information, and we argue that patient’s access to online information is changing the relationship between health care providers and patients.
    Keywords: ICT, broadband internet, health care, Cesarean-section
    JEL: D80 I12 L82 L86
    Date: 2020
  2. By: Steffen Elstner; Christian Grimme; Valentin Kecht; Robert Lehmann
    Abstract: We study whether technology gains in sectors related to Information and Communications Technology (ICT) increase productivity in the rest of the economy. To separate exogenous gains in ICT from other technological progress, we use the relative price of ICT goods and services in a structural VAR with medium-run restrictions. Using local projections to estimate the effect of ICT-related technology gains on sectoral technology (TFP), we find two sets of results. First, since the mid-2000s there have been positive and persistent technology spillovers to sectors intensively using ICT. Second, neglecting leasing activity leads to an overestimation of the TFP response for all sectors except the leasing sector, where it is strongly underestimated.
    Keywords: digitization, information and communications technology, technology shocks, local projections, structural VARs, medium-run restrictions, growth accounting
    JEL: C32 D24 E22 E24 O33 O47 O52
    Date: 2020
  3. By: Nicholas Economides (Professor of Economics, NYU Stern School of Business, New York, New York 10012); Ioannis Lianos (President, Hellenic Competition Commission and Professor of Global Competition Law and Public Policy, Faculty of Laws, University College London)
    Abstract: Dominant digital platforms such as Google and Facebook collect personal information of users by default precipitating a market failure in the market for personal information. We establish the economic harms from the market failure. We discuss conditions for eliminating the market failure and various remedies to restore competition.
    Keywords: personal information; Internet search; Google; Facebook; digital; privacy; restrictions of competition; exploitation; market failure; data dominance; abuse of a dominant position; unfair commercial practices; excessive data extraction; self-determination; behavioral manipulation; remedies; portability; opt-out.
    JEL: K21 L1 L12 L4 L41 L5 L86 L88
    Date: 2021–01
  4. By: Emmanuel LORENZON
    Abstract: We consider a departure from net neutrality by an Internet service provider (ISP) that financially discriminates among content providers through bilateral zero rating contracts. Zero rating is an instrument to distort competition between content providers and the way in which consumers value content. We analyze its implications for the incentives to provide quality in the market for content and to invest in broadband infrastructure. Zero rating makes content more expensive for consumers to access and implies a downward distortion of quality by increasing downward vertical differentiation. Content providers move from a minimal differentiation equilibrium to a downward vertical differentiation outcome. Next, we find that while zero rating happens to reduce congestion, a profit-maximizing ISP always underinvests in the broadband infrastructure in the discriminatory network. We highlight that this underprovision comes from a standard rent-extraction argument and a new cost-alleviation channel, which relates to the complementarity between network capacity and content quality. Finally, the ISP always implements zero rating, which is welfare reducing and detrimental to consumers.
    Keywords: Internet; Net-Neutrality; Zero-Rating; Network capacity; Content quality; Congestion; Three-part tariff
    JEL: D21 L12 L51 L96 R41
    Date: 2020
  5. By: David Hanrahan (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW))
    Abstract: The tax challenges of digitalization have been to the forefront of national and international discussions on public revenues in recent years. The digital transformation is seen as being an exacerbating factor in the erosion of tax bases and the shifting of profits to low tax jurisdictions, particularly by multinational companies, thus reducing tax revenues for governments. While there is a large literature examining the role of ICT and digitalization in raising economic growth, productivity and other macroeconomic variables, the relationship between digitalization and tax revenues has been relatively understudied - despite being one of key drivers of what could be most significant change to international tax rules in a century. This study utilizes panel data covering OECD countries during the period from 1995 to 2018, and examines the effect of the rise of digitalization on tax revenues employing both static and dynamic panel data analysis techniques. The findings indicate that digitalization may have a negative impact on the ability of a country with high digital dynamics to generate higher tax returns.
    Keywords: Digitalization, taxation, tax revenues, ICT, OECD countries
    JEL: H20 H25 L81 L86
    Date: 2020–12
  6. By: Juan Sebastian Vélez-Velásquez
    Abstract: Economic theory is inconclusive regarding the effects of banning third-degree price discrimination under imperfect competition because they depend on how the competing firms rank their market segments. When, relative to uniform pricing, all competitors want higher prices in the same market segments, a ban on price discrimination will reduce profits and benefit some consumers at the expense of others. If, instead, some firms want to charge higher prices in segments where their competitors want to charge lower prices, price discrimination increases competition driving all prices down. In this case, forcing the firms to charge uniform prices can increase their profits and reduce consumer surplus. We use data on Colombian broadband subscriptions to estimate the demand for internet services. Estimated preferences and assumptions about competition are used to simulate a scenario in which firms lose their ability to price discriminate. Our results show large effects on consumer surplus and large effects on firms’ profits. Aggregate profits increase but the effects for individual firms are heterogeneous. The effects on consumer welfare vary by city. In most cities, a uniform price regime causes large welfare transfers from low-income households towards high-income households and in a few cities, prices in all segments rise. Poorer households respond to the increase in prices by subscribing to internet plans with slower download speed. **** La teoría económica no es muy concluyente con respecto a los efectos de pasar de un régimen de discriminación de precios de tercer grado a un régimen de precio uniforme en un ambiente de competencia imperfecta, porque dichos efectos dependen de como las firmas que compiten ranquean los segmentos de mercado. Si las firmas coinciden en el ranking que hacen de los segmentos de mercado, un régimen de precio uniforme reduce los beneficios de la firma comparado con los beneficios que harían bajo discriminación. Si en cambio, las firmas tienen diferentes rankings para los segmentos de mercado, el precio uniforme puede ser más alto que los precios bajo discriminación, incrementando los beneficios de las firmas a expensas de los consumidores. En este articulo, usamos datos sobre suscripciones a servicios de internet en Colombia para estimar la demanda por dichos servicios. Además hacemos supuestos sobre la forma en que compiten las firmas lo que nos perimte simular equilibrios en los que las firmas cobran precios uniformes. Los resultados muestra grandes transferencias entre grupos de consumidores y moderados efectos sobre los beneficios de las firmas. Los beneficios agregados de las firmas aumentan ligeramente, pero los cambios en beneficios individuales son heterogéneos. Los efectos sobre el bienestar de los consumidores varían por ciudad. En la mayoría de las ciudades el precio uniforme causa transferencias desde hogares de bajos ingresos a hogares más ricos. Pero en unas cuantas ciudades los precios aumentan en todos los segmentos. Los hogares más pobres responden al aumento de precios sustituyendo por planes de menor calidad.
    Keywords: Price discrimination, Regulation, Market structure, Discriminación de precios, Regulación, Estructura de mercado
    JEL: L10 L20 L50
    Date: 2020–12
  7. By: Mattila, Juri; Ali-Yrkkö, Jyrki; Seppälä, Timo
    Abstract: Abstract Cyber threats are rapidly increasing around the world. In Finland, the amount of data breaches has doubled in a couple of years. The cost of being targeted for a cyber attack is estimated to increase even more rapidly. However, the economic effects of cyber threats on the Finnish economy are not comprehensively understood. Especially, very little is known about the state of microenterprises in this regard. While the level of cybersecurity in Finnish companies is above the European average, Finland is falling behind the top countries according to many different indicators. Especially data leaks appear to be particularly challenging for Finnish companies. The global demand of cybersecurity products and services is growing quickly. In Finland, however, this growth is restricted by a shortage of skilled cybersecurity professionals. As Finland invests heavily in the improvement of digital skills, the question arises whether these efforts are focused correctly in regards to competences in cybersecurity.
    Keywords: Cybersecurity, Digitalization, Microenterprise, International competitiveness
    JEL: L86 M15 O33
    Date: 2020–12–14
  8. By: Valerio STERZI
    Abstract: Many PAEs hide behind dozens of unknown subsidiaries or shell companies with obscure ownership. Meanwhile, the United States Patent and Trademark Office (USPTO), like many other patent offices, does not impose a strict time period for recording the change of ownership of a patent, allowing the holder to gain an advantage by controlling the timing of its ownership disclosure. In this paper we analyze recording lags in patent transactions (defined as the time lag from the execution of the patent assignment to USPTO recording) and show that PAEs strategically notify the patent office of the transaction as a function of their litigation strategies. In particular, OLS estimates suggest that for every ten days that separate the date of the start of the litigation from the execution of the patent transaction, PAEs delay the recordation of the transaction by almost four days (while the lag is about two days when the assignee is a product company). Longer recording lags are especially,associated with transactions related to patents transferred to PAEs in the ICT sector, that are litigated in the District Court in the Eastern District of Texas and that are acquired by PAEs through unknown subsidiaries.
    Keywords: Non-practicing entities; Patent trolls; Patent litigation; Patent ownership transparency
    JEL: O31 O34 D23
    Date: 2020
  9. By: Nicola Pierri; Yannick Timmer
    Abstract: We study the economic effects of information technology (IT) adoption during the COVID-19 pandemic. Using data on IT adoption covering almost three million establishments in the US, we find that technology adoption can partly shield the economy from the impact of the pandemic. In areas where firms adopted more IT the unemployment rate rose less in response to social distancing. Our estimates imply that if the pandemic had hit the world 5 years ago, the resulting unemployment rate would have been 2 percentage points higher during April and May 2020 (16% vs. 14%), due to the lower availability of IT. Local IT adoption mitigates the labor market consequences of the pandemic for all individuals, regardless of gender and race, except those with the lowest level of educational attainment.
    Keywords: technology IT adoption, inequality, skill-biased technical change
    JEL: G21 G14
    Date: 2020
  10. By: Keiko Inoue; Jacques Morisset
    Keywords: Information and Communication Technologies - Digital Divide Macroeconomics and Economic Growth - Economic Conditions and Volatility Macroeconomics and Economic Growth - Fiscal & Monetary Policy Macroeconomics and Economic Growth - Macroeconomic Management Social Protections and Labor - Labor Markets
    Date: 2020–04
  11. By: Elisabetta Raguseo (Polito - Politecnico di Torino [Torino]); Claudio Vitari (AMU - Aix Marseille Université); Federico Pigni (GEM - Grenoble Ecole de Management)
    Abstract: Big data has gained momentum as an Information Technology that is capable of supporting organizational efforts to generate new and better business value. We here contribute to the emerging literature on big data analytic (BDA) solutions by investigating the moderating roles of firm size and industry concentration in the relationship between BDA solutions and firm profitability. Using a unique panel data set that covers 13 years, from 2004 to 2016, which contains information about 176 firms, we provide robust econometric empirical evidence of the negative moderating effects of industry concentration and the positive moderating effects of firm size on the relationship between the use of BDA solutions and firm profitability. Our findings provide strong empirical evidence on the business value of BDA as well as the essential role played by contextual conditions that managers should consider.
    Keywords: IT business value,big data analytics,firm profitability,econometric analysis,industry concentration,firm size
    Date: 2020–11
  12. By: Kamara, Irene (Tilburg Law School)
    Abstract: In 2019, the Cybersecurity Act, the EU law aiming to achieve high level of cybersecurity in the Union and Member States, entered into force. The CSA belongs to a broader set of Union laws providing a framework of legal protection of individual and collective rights from harmful use of information and communication technologies. Those laws introduce private law instruments for the achievement of legislative goals.1 Despite the overarching similarities of the regulated fields, the Union legislator adopted seemingly different approaches in introducing private law instruments. The Chapter seeks to comparatively present the certification frameworks as introduced in the Cybersecurity Act and the General Protection Regulation, with the aim to provide an understanding on the legislative choices and the normative, implementation and policy reasons underpinning the introduction of private law instruments in Union laws.
    Date: 2020–12–06
  13. By: Armanda Cetrulo; Dario Guarascio; Maria Enrica Virgillito
    Abstract: Why are there so many non-teleworkable occupations? Is teleworking only a matter of ICT usage or does it also reflect the division of labour and the underlying hierarchical layers inside organizations? What does it happen to those workers not able to telework in terms of socio-economic risks, and how does the gender dimension interact with risk stratification? Hereby, we intend to shed light on these questions using a detailed integrated dataset at individual and occupational level (Indagine Campionaria delle Professioni, Indagine delle Forze di Lavoro and Inail archive) which provides information on different nature of risks (income, employment and safety). Our results entail that, first, class attributes strongly influence the chance of working from home, second, those individuals who are not able to perform their work remotely are more exposed to transition to unemployment, to earn low wages, and to safety and health risks, third, being woman and employed with a temporary contract significantly amplify risk stratification.
    Keywords: Occupational structure; teleworking; COVID-19; social divides.
    Date: 2020–12–16

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