nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2021‒03‒08
eleven papers chosen by
Marek Giebel
Universität Dortmund

  1. Breaking Through the Digital Ceiling: ICT Skills and Labour Market Opportunities By David Pichler; Robert Stehrer
  2. Hold the line: The evolution of telecommunications provisions in regional trade agreements By Monteiro, José-Antonio
  3. Estimating Medical Cost Savings from Supporting Health Behavior Using AI and ICT in Japan By Fusae OKANIWA; Hiroshi YOSHIDA
  4. How to issue a central bank digital currency By David Chaum; Christian Grothoff; Thomas Moser
  5. A Retrospective Study of State Aid Control in the German Broadband Market By Tomaso Duso; Mattia Nardotto; Jo Seldeslachts
  6. Intangible Capital and Innovation: An Empirical Analysis of Vietnamese Enterprises By Qing Li; Long Hai Vo
  7. Understanding the digital security of products: An in-depth analysis By OECD
  8. Trade in Information Technologies and Changes in the Demand for Occupations By Vahagn Jerbashian
  9. On the Internet you can be anyone: An experiment on strategic avatar choice in online marketplaces By Abraham Diya; Ben Greiner; Marianne Stephanides
  10. The WTO Global Trade Costs Index and its determinants By Rubínová, Stela; Sebti, Mehdi
  11. Enhancing the digital security of products: A policy discussion By OECD

  1. By: David Pichler; Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: This paper analyses the impact of ICT-skills on individuals’ labour market mobility patterns, in particular job-to-job, employment- to-unemployment and unemployment-to-employment transitions. Based on the OECD’s Programme for the International Assessment of Adult Competencies (PIAAC) and longitudinal EU-SILC data, individuals’ labour market outcomes are examined over the period 2011-2017 in nine EU countries and the UK. Our results indicate that individuals with strong ICT skills have better opportunities and are therefore not only more likely to change jobs more frequently but are also less likely to face unemployment. Furthermore, ICT skills support unemployment exit towards medium and high digital occupations. A certain minimum level of ICT skills also supports unemployment exit towards low digital occupations but seems to make employment in such occupations less likely once this threshold is crossed. Overall, ICT skills have less predictive power for transition towards medium digital occupations. Thus, while ICT skills appear to improve labour market opportunities significantly, it seems that there are still jobs that require relatively few ICT skills.
    Keywords: digital skills, labour market transitions
    JEL: C25 J23
    Date: 2021–02
  2. By: Monteiro, José-Antonio
    Abstract: Based on the first comprehensive mapping of telecommunications provisions telecommunications in regional trade agreements (RTAs), this paper shows that telecommunications provisions in RTAs have evolved and expanded significantly over the years. While some provisions focus on information and communications technologies (ICT) infrastructure, policy and investment, other provisions address telecommunications services as well as standards and conformity assessment procedures of ICT equipment. The most detailed and comprehensive telecommunications provisions are found in stand-alone chapters, sections or annexes on telecommunications services. A network analysis further reveals that telecommunications provisions remain highly heterogenous. Only a limited number of, mostly advanced economies, tend to negotiate very detailed and comprehensive provisions on telecommunications in their respective RTAs. While many telecommunications provisions found in RTAs draw on existing WTO rules, including the Annex on Telecommunications to the General Agreement on Trade in Services (GATS), some GATS provisions, the Reference Paper on Regulatory Principles on Basic Telecommunications and the Agreement on Technical Barriers to Trade, an increasing number of RTAs incorporate explicit provisions that expand existing WTO disciplines and address new regulatory topics related to telecommunications services, such as international roaming, net neutrality, and stolen or lost mobile terminal equipment.
    Keywords: World Trade Organization,Regional Trade Agreements,Telecommunications,Digitaleconomy,Network Analysis
    JEL: F13 F15
    Date: 2021
  3. By: Fusae OKANIWA; Hiroshi YOSHIDA
    Abstract: The fields of artificial intelligence (AI) and information and communication technology (ICT) are currently witnessing remarkable progress, and they are now being applied to systems that encourage people to engage in voluntary health promotion behaviors. In the future, health intervention systems will likely be replaced by AI. The development of such AI-based health intervention systems is still in its infancy, however, and there is little evidence of their effectiveness. The purpose of this study is to estimate the macro health care cost savings that would result from the widespread use of AI-based health intervention systems. This study to estimates the healthcare cost reductions that could be achieved if AI interventions were to spread and the number of obese people were to decrease, based on the estimates of Okaniwa and Yoshida (2020). It was estimated that AI interventions could reduce medical costs for diabetes and hypertensive diseases by 8.2% and 7.2%, respectively. The findings of this paper could contribute to providing preliminary material for new developments in future research in this field.
    Date: 2020–12
  4. By: David Chaum; Christian Grothoff; Thomas Moser
    Abstract: With the emergence of Bitcoin and recently proposed stablecoins from BigTechs, such as Diem (formerly Libra), central banks face growing competition from private actors offering their own digital alternative to physical cash. We do not address the normative question whether a central bank should issue a central bank digital currency (CBDC) or not. Instead, we contribute to the current research debate by showing how a central bank could do so, if desired. We propose a token-based system without distributed ledger technology and show how earlier-deployed, software-only electronic cash can be improved upon to preserve transaction privacy, meet regulatory requirements in a compelling way, and offer a level of quantum-resistant protection against systemic privacy risk. Neither monetary policy nor financial stability would be materially affected because a CBDC with this design would replicate physical cash rather than bank deposits.
    Keywords: Digital currencies, central bank, CBDC, blind signatures, stablecoins
    JEL: E42 E51 E52 E58 G2
    Date: 2021
  5. By: Tomaso Duso; Mattia Nardotto; Jo Seldeslachts
    Abstract: We provide an evaluation of the impact of public subsidy schemes that aimed to support the development of basic broadband infrastructure in rural areas of Germany. Such subsidies are subject to state aid control by the European Commission (EC). While the EC increasingly recognises the role of economic analysis in controlling public aid to companies, there are to date no full retrospective studies performed on state aid control, especially assessing the so-called balancing test. In this study, we do not only analyse whether the aid was effective in solving a market failure – low broadband coverage in rural areas – but also study its impact on competitive outcomes, on both rival firms and consumers. We adopt a difference-in-differences framework after using a matching procedure to account for selection on observables. We find that the aid significantly increased broadband coverage. More importantly, we find that the number of internet providers has significantly increased in the municipalities receiving aid. This additional entry decreased average prices. Therefore, the subsidies complied with EU state aid rules, both in terms of effectiveness and competition.
    Keywords: state aid, ex-post evaluation, broadband, coverage, entry, competition, prices
    JEL: C23 D22 L10 L40 L64
    Date: 2021
  6. By: Qing Li (Department of Economics and Finance, SILC Business School, Shanghai University.); Long Hai Vo (Economics Department, Business School, the University of Western Australia; Research Centre in Business, Economics and Resources, Ho Chi Minh City Open University; Faculty of Finance, Banking and Business Administration, Quy Nhon University)
    Abstract: Intangible capital is an important growth driver in the modern knowledge-based and innovation-driven economy. While there seems to be sufficient support for the role of intangible capital from developed economies, evidence from fast-growing developing countries is much more limited. This paper explores the heterogeneous pattern and potential determinants of firm-level intangible capital investment in Vietnam. We found that firm size, human capital, and information and communication technology increase the likelihood to invest in intangible capital. Additionally, an inverted-U shaped relation is identified between market competition and intangible capital investment: Moderate levels of market competition induce firms in Vietnam to invest more in innovative activities, but the effect of stronger competition diminishes.
    Keywords: Intangible capital investment; innovation; Vietnamese firms
    JEL: O34 O12 R11
    Date: 2021
  7. By: OECD
    Abstract: Economies and societies are increasingly reliant upon “smart products” that contain code and can connect to one another, e.g. through the Internet. Recent cyber-attacks such as Mirai, WannaCry, NotPetya and SolarWinds have underlined that the exploitation of vulnerabilities in smart products can have severe economic and social consequences. Such attacks increasingly threaten users’ safety and well-being, as well. This report shows that economic factors play an important role in the relative “insecurity” of smart products. It develops an analytical framework based on the value chain and lifecycle of smart products, and applies the framework to three case studies: computers and smartphones, consumer Internet of Things (IoT) devices and cloud services. It demonstrates that complex and opaque value chains lead to a misallocation of responsibility for digital security risk management, while significant information asymmetries and externalities often limit stakeholders’ ability to behave optimally.
    Date: 2021–02–09
  8. By: Vahagn Jerbashian
    Abstract: I use data from the World Input-Output Database and show that trade in information technologies (IT) has a significant contribution to the growth in foreign intermediate goods in the 2001-2014 period. China has strongly contributed to the rise in trade in IT and has become one of the major foreign suppliers of IT. I merge these data with the EU KLEMS database and EU Labour Force Survey and obtain a dataset of 12 European countries and 2001-2007 period. I show that IT imports from China are associated with lower IT prices in European countries. The fall in IT prices has increased the demand for high wage occupations and reduced the demand for medium wage occupations. Nearly 25 percent of the variation in the demand for occupations can be attributed to the trade with China.
    Keywords: trade, information technologies, China, demand for occupations
    JEL: F16 J23 J24 O33 L63
    Date: 2021
  9. By: Abraham Diya (Wirtschaftsuniversität Wien, Institute for Markets and Strategy, Austria, Masaryk University, Brno, Czech Republic); Ben Greiner (Wirtschaftsuniversität Wien, Institute for Markets and Strategy, Austria, University of New South Wales, School of Economics); Marianne Stephanides (Wirtschaftsuniversität Wien, Institute for Markets and Strategy)
    Abstract: In order to decrease social distance and increase trust on their platforms, many online marketplaces allow traders to be represented by profile pictures or avatars. In a laboratory experiment, we investigate whether the presence of seller avatars affects trading behavior in a market. We contrast markets without avatars with markets where avatars truthfully represent traders and markets where avatars can be freely changed at any time and may thus be chosen strategically. At the aggregate level, we find that the presence of truthful avatars increases the trustwothiness of sellers, but that this effect is undone when avatars can be chosen strategically. We do not detect aggregate effects on buyers´trusting choices. Female avatars are more trusted, and correspondignly in the treatment with free avatar choice men are more likely to represent themselves with a female avatar then vice versa.
    Keywords: online marketplaces, market design, trust and trustworthiness, avatars, strategic behavior
    JEL: C72 C90 D91
    Date: 2021–02
  10. By: Rubínová, Stela; Sebti, Mehdi
    Abstract: This study provides a decomposition of the WTO Global Trade Costs Index into five policy-relevant components: transport and travel costs; information and transaction costs; ICT connectedness; trade policy and regulatorydifferences; and governance quality. The WTO Global Trade CostsIndex is based on a new methodology by Egger et al. (2021) that delivers directional trade cost estimates and sector-specific elasticities whichare crucialforinferring tradecostsfromtradeflows data. Theresulting measure of trade costs includes all factors that burden foreign sales more than domestic ones. In this study, we run a sectoral regression analysis to determine what drives trade costs variation across partners and use the resultstodecompose the variation in trade costsin eachsector. We show that transport and travel costs play the most important role in overall trade costs both for goods and services. Tradepolicy and regulatorydifferences are the second major component of trade costs in most sectors, accounting for at least 14%. The importance of this component is particularly striking for trade among lower-income economies. Moreover, our results alsoshow that trade policy in services sectors matters for trade costs in goods, and vice versa. Finally, we find that access to information and communication technology is especially important for tradecostsin services where its importance hasincreasedover time, highlighting the role that digitaldelivery plays in this sector.
    Keywords: Trade costs,gravity model,non-tariff barriers,trade integration,trade elasticity
    JEL: F10 F14 F15
    Date: 2021
  11. By: OECD
    Abstract: From “traditional” software to cloud services and Internet of Things (IoT) devices, our economies and societies are increasingly reliant upon “smart products” that contain code and can connect to each other, e.g. through the Internet. Such products are vulnerable to cyber security risk, and economic factors often play a major role in their relative ‘insecurity’. This report discusses how policy makers can address key challenges that prevent smart products from reaching an optimal level of digital security. Increasing transparency and information sharing, promoting co-operation (including at the international level), and ensuring the duty of care of supply-side actors (e.g. through the principles of security-by-design, security-by-default and responsible end-of-life) are important avenues for policy action. Policy makers can leverage many tools to achieve these objectives, from public procurement, certification and multi-stakeholder partnerships, to labels and ex ante legal requirements.
    Date: 2021–02–09

This nep-ict issue is ©2021 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.
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