nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2021‒03‒15
ten papers chosen by
Marek Giebel
Universität Dortmund

  1. Deepening or delinking? Innovative capacity and global value chain participation in the ICT sectors By Lema, Rasmus; Pietrobelli, Carlo; Rabellotti, Roberta; Vezzani, Antonio
  2. Broadband internet and the stock market investments of individual investors By Hans K. Hvide; Tom G. Meling; Magne Mogstad; Ola L. Vestad
  3. The asymmetric effect of internet access on economic growth in sub-Saharan Africa: Insight from a dynamic panel threshold regression By Idris A. Abdulqadir; Simplice A. Asongu
  4. The Implications of Social Networks on the Quality of Accounting Information By Xu, Feng C.
  5. Sales Prediction Model Using Classification Decision Tree Approach For Small Medium Enterprise Based on Indonesian E-Commerce Data By Raden Johannes; Andry Alamsyah
  6. Progress of Digital Platforms and their Impact on Japan's Industrial Competitiveness By MOTOHASHI Kazuyuki
  7. What has been happening to Indonesia’s Manufacturing Industry? By Kiki Verico
  8. Heterogeneous impact of internet availability on female labour market outcomes in an emerging economy: Evidence from Indonesia By Niken Kusumawardhani; Rezanti Pramana; Nurmala Saputri; Daniel Suryadarma
  9. An economic perspective on data and platform market power By MARTENS Bertin
  10. No Successor, No Success? The Impact of a Little Son on Business Performance By KODAMA Naomi; MURAKAMI Yoshiaki; TANAKA Mari

  1. By: Lema, Rasmus (Aalborg University, and University of Johannesburg); Pietrobelli, Carlo (UNU-MERIT, and University Roma Tre); Rabellotti, Roberta (University of Pavia, and Aalborg University); Vezzani, Antonio (University Roma Tre)
    Abstract: Innovation trajectories in global value chains can take highly differentiated pathways. Firms and other organisations operating in a sector in a given country may gain or lose innovative capacity over time compared to their peers in other countries. In this paper we address the question: do stylised trajectories emerge from the analysis of countries' relative innovative capacity and global value chain participation? We draw explorative insights from a cluster analysis of 45 countries on the subsectors of the information and communication technology industry: hardware and software. Our analysis uncovers remarkable differences across sectors and countries. We identify different trajectories and discuss the sub-sectoral specificities which contribute to explaining these differences. The association between the strengthening of innovative capacity and deeper insertion in global value chains applies to only a handful of countries and only in the software subsector. These findings raise questions for future research on innovation in global value chains.
    Keywords: Global value chains, Innovation capacity, Innovation trajectories, Hardware, Software, ICT
    JEL: F23 D23 L22 L25 O10 O32 O38
    Date: 2021–03–01
  2. By: Hans K. Hvide; Tom G. Meling; Magne Mogstad; Ola L. Vestad (Statistics Norway)
    Abstract: We study the effects of broadband internet use on the portfolio selection of individual investors. A public program in Norway provides plausibly exogenous variation in internet use. Our instrumental variables estimates show that internet use causes a substantial increase in stock market participation, driven primarily by increased fund ownership. Existing investors increase the fraction of their portfolios held in funds and do not increase their trading activity in stocks. Access to fast internet seems to induce individual investors to make better financial decisions and hence leads to a “democratization of finance”.
    Keywords: equity market participation; investor welfare; portfolio selection; stock market participation.
    JEL: D83 G11 J2
    Date: 2021–01
  3. By: Idris A. Abdulqadir (Federal University Dutse, Dutse, Nigeria); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: This article investigates the asymmetric effect of internet access (index of the internet) on economic growth in 42 sub-Saharan African (SSA) countries over the period 2008-2018. The estimation procedure is obtained following a dynamic panel threshold regression technique via 1000 bootstrap replications and the 400 grids search developed by Hansen (1996, 1999, 2000). The investigation first explores the presence of inflection points in the relationship between internet access and economic growth through the application of Hansen's threshold models. The finding from the nonlinearity threshold model revealed a significant internet threshold-effect of 3.55 percent for growth. The article also examines the linear short-run effect of internet access on economic growth while controlling for the effects of private sector credit, trade openness, government regulation, and tariff regimes. The marginal effect of internet access is evaluated at the minimum, and the maximum levels of government regulation and tariffs regime are positive. On the other hand, the minimum and maximum levels of private sector credit and trade openness are negative via the interaction terms. The article advances the literature by its nonlinear transformation of the relevance of internet access on economic growth by exploring interactive mechanisms of: internet access versus financial resource, internet access versus trade, internet access versus government regulation, and internet access versus the tariff regimes from end-user subscriptions. In policy terms, the statistical significance of the joint impact of government regulations and tariff regimes is relevant in the operation of the telecommunication industry in SSA countries.
    Keywords: Internet access; economic growth; government regulations; trade openness; tariff regimes; sub-Saharan Africa
    Date: 2021–01
  4. By: Xu, Feng C.
    Abstract: The information technology (IT) revolution has shown widespread and massive development in communications and social networks, leading to the use of this technology daily. As a result, a number of Accounting features were added and turned into an E-version from a traditional version. This paper submits a study of the social network's role in growing the quality of accounting information by evaluating it according to distributed questionnaires. The researchers distributed 20 questionnaires on 20 academic persons and analyzed the results via excel tools, and the main result of this paper is that the Social networks have a big effect on the accounting information because they will build a good background for the accountants.
    Date: 2021–03–03
  5. By: Raden Johannes; Andry Alamsyah
    Abstract: The growth of internet users in Indonesia gives an impact on many aspects of daily life, including commerce. Indonesian small-medium enterprises took this advantage of new media to derive their activity by the meaning of online commerce. Until now, there is no known practical implementation of how to predict their sales and revenue using their historical transaction. In this paper, we build a sales prediction model on the Indonesian footwear industry using real-life data crawled on Tokopedia, one of the biggest e-commerce providers in Indonesia. Data mining is a discipline that can be used to gather information by processing the data. By using the method of classification in data mining, this research will describe patterns of the market and predict the potential of the region in the national market commodities. Our approach is based on the classification decision tree. We managed to determine predicted the number of items sold by the viewers, price, and type of shoes.
    Date: 2021–03
  6. By: MOTOHASHI Kazuyuki
    Abstract: Digitalization has a transformative impact on innovation in firms and markets, and new business models based on digital platforms are disrupting traditional industries. However, understanding the impact of digital platforms on the supply side of manufacturing industries, where Japan's industrial competitiveness is based, is insufficient. This paper conducts and discusses a review of existing studies on digital platforms and the relationship between digitalization and Japan's industrial competitiveness. A platform business can be categorized into three groups, type 1 (internet platformer type), type 2 (producer ecosystem type) and type 3 (IoT data-use type), depending on the existence of direct and/or indirect network effects on the producer and consumer sides of the platform. We have compared these three types of platforms together with "pipeline businesses" (with a traditional supply chain model) regarding the impact of digitalization on each business model. Our analysis found that digitalization does not directly affect the existing pipeline model, as is shown in the automotive industry, for example. However, the convergence of virtual and physical environments (CPS: Cyber-Physical System) redefines the boundaries of existing markets, which introduces a chance of existing pipeline models being displaced by new integrated services, based on platform models.
    Date: 2021–01
  7. By: Kiki Verico (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI))
    Abstract: This paper is the second part of the first paper published by the LPEM UI on January 18th 2021 (Verico, 2021a). This first part discussed Indonesia’s output gap, the global pandemic’s impact, and the scenario to avoid the middle-income trap by 2040. In this second part, the paper figures out the manufacturing sector performance from 1968 until 2019, before the global pandemic hit Indonesia’s economy. Indonesia’s economy needs an adjustment that depends on the pandemic containment to achieve even higher economic growth to compensate for economic contraction during the pandemic. This paper finds that Indonesia’s manufacture can boost economic growth, decrease open unemployment and improve productivity. This paper argues that Indonesia can achieve the second wave of the Chenery-Syrquin phenomenon of economic transformation from service to manufacturing through two scenarios: one, medium to long-run over the enhancement of the backward linkage of global value chains (GVCs), and two, natural short-run with the role of information and communication technology (ICT).
    Keywords: economic growth — manufacturing — industrial structure — economic transformation — Information Communication Technology
    JEL: D83 F43 L60 N10 O14
    Date: 2021
  8. By: Niken Kusumawardhani; Rezanti Pramana; Nurmala Saputri; Daniel Suryadarma
    Abstract: Greater female labour market participation has important positive implications not only for women's empowerment and the well-being of their families but also for the economy they live in. In this paper, we examine the various effects of internet availability on women's labour market outcomes in Indonesia. As each worker subgroup tends to respond differently to changes in technology, examining the heterogeneity in the impact of internet availability on female labour market outcomes is central to our research.
    Keywords: Internet, Labour market, Indonesia, Female labour force participation
    Date: 2021
  9. By: MARTENS Bertin (European Commission – JRC)
    Abstract: This paper starts with some basic economic characteristics of data that distinguish them from ordinary goods and services, including non-excludability and non-rivalry, economies of scope in data re-use and aggregation, the social value of data and their role in generating network effects. It explores how these characteristics contribute to the emergence of large digital platforms that generate a combination of positive and negative welfare effects for society, including data-driven network effects. It distinguishes between lexicographic and probabilistic data-driven matching in networks. Both may lead to market "tipping". It emphasizes the social value of data and the positive and negative social externalities that may come with this. Platforms are necessary intermediaries to generate the social welfare or network externalities from data. However, the economic role of data-driven platforms is ambivalent. On the one hand, platforms enable society to benefit from positive externalities in data collection via economies of scale and scope in data aggregation of transactions and interactions across users, both firms and consumers. That gives them a privileged market overview that none of the individual users has. Platforms can use this information asymmetry to facilitate interaction and increase welfare for users. These data externalities attract users to the platform. On the other hand, data-driven network effects may result in monopolistic market power of platforms which they can use for their own benefit, at the expense of users. Any policy intervention that seeks to address the market power of online platforms requires careful balancing between these two poles. Finally, the paper briefly discusses ecosystems that leverage data to coordinate interactions between different platforms.
    Keywords: data, platforms, market power
    Date: 2021–02
  10. By: KODAMA Naomi; MURAKAMI Yoshiaki; TANAKA Mari
    Abstract: The dynasty model, which assumes the presence of intergenerational altruism, implies that business owners will have more incentive to improve the firm performance if they expect their children to take over their firms. This study empirically examines how top managers' expectations about future family succession affect the performance of small businesses. Utilizing the sex of the top manager's first-born child as an instrumental variable for the manager's expectations about business succession by his child, we find that the existence of a potential family successor has a positive effect on profit. We also find that the presence of a potential family successor induces performance-enhancing actions and behaviors on the part of managers, such as improving operational efficiency, selecting better suppliers, and investing in information technology.
    Date: 2021–03

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