nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2021‒05‒10
six papers chosen by
Marek Giebel
Universität Dortmund

  1. Automation, Offshoring and Employment Distribution in Western Europe By Jocelyn Maillard
  2. A Retrospective Study of State Aid Control in the German Broadband Market By Duso, Tomaso; Nardotto, Mattia; Seldeslachts, Jo
  3. Trade sentiment and the stock market: new evidence based on big data textual analysis of Chinese media By Amstad, Marlene; Gambacorta, Leonardo; He, Chao; Xia, Fan Dora
  4. Techies, Trade, and Skill-Biased Productivity By Harrigan, James; Resheff, Ariell; Toubal, Farid
  5. Impact of digital economic activity on regional economic growth: A Case study from northern Minas Gerais between 2009 To 2018 By Dr. Cesar R Salas-Guerra
  6. Public Guarantees for Small Businesses in Italy during Covid-19 By Core, Fabrizio; De Marco, Filippo

  1. By: Jocelyn Maillard (Univ Lyon, Université Lumière Lyon 2, GATE UMR 5824. 93, Chemin des Mouilles, F-69130 Ecully, France)
    Abstract: This paper investigates the effects of automation and offshoring on the dynamics of the occupational distribution of employment with a focus on Western Europe between 2000 and 2016. I use a general equilibrium model with three regions, three types of workers, ICT capital, trade in final goods and endogenous offshoring. Fed with exogenous measures of ICT-capital prices and trade costs, the model replicates key features of the data. It matches the observed dynamics of offshoring to Eastern Europe and Asian countries. It also reproduces accurately the observed polarization of the labor market: abstract and manual labor increase while routine labor falls. A counterfactual experiment reveals that automation is the main driver of polarization. Since it is also the only factor that drives individuals to become abstract (high-skill) workers, it is welfare enhancing. The effects of falling trade costs on labor polarization are smaller, but imply welfare gains.
    Keywords: Automation, offshoring, labor-market polarization, European employment distribution
    JEL: F16 F41 J24 J62 O33
    Date: 2021
  2. By: Duso, Tomaso; Nardotto, Mattia; Seldeslachts, Jo
    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: Broadband; Competition; Coverage; Entry; Ex-Post Evaluation; prices; state aid
    JEL: C23 D22 L1 L4 L64
    Date: 2021–02
  3. By: Amstad, Marlene; Gambacorta, Leonardo; He, Chao; Xia, Fan Dora
    Abstract: Trade tensions between China and US have played an important role in swinging global stock markets but effects are difficult to quantify. We develop a novel trade sentiment index (TSI) based on textual analysis and machine learning applied on a big data pool that assesses the positive or negative tone of the Chinese media coverage, and evaluates its capacity to explain the behaviour of 60 global equity markets. We find the TSI to contribute around 10% of model capacity to explain the stock price variability from January 2018 to June 2019 in countries that are more exposed to the China-US value chain. Most of the contribution is given by the tone extracted from social media (9%), while that obtained from traditional media explains only a modest part of stock price variability (1%). No equity market benefits from the China-US trade war, and Asian markets tend to be more negatively affected. In particular, we find that sectors most affected by tariffs such as information technology related ones are particularly sensitive to the tone in trade tension.
    Keywords: Big Data; Machine Learning; neural network; sentiment; Stock returns; Trade
    JEL: C45 C55 D80 F13 F14 G15
    Date: 2021–01
  4. By: Harrigan, James; Resheff, Ariell; Toubal, Farid
    Abstract: We study the impact of firm-level choices on ICT, R&D, exporting and importing on the evolution of productivity, its bias towards skilled workers, and implications for labor demand. We use a novel measure of firm-level R&D and ICT adoption: employment of "techies" who perform these tasks. We develop methodology for estimating nested-CES production functions and for measuring both Hicks-neutral and skill-augmenting technology differences at the firm level. Using administrative data on French firms we find that techies, exporting and importing raise skill-biased productivity. In contrast, only ICT techies raise Hicks-neutral productivity. On average, higher firm-level skill biased productivity hardly affects low-skill employment, even as it raises relative demand for skill, due to the cost-reducing effect. ICT accounts for large increases in aggregate demand for skill, mostly due to the effect on firm size, less so through within-firm changes. Exporting, importing, and R&D have smaller aggregate effects.
    Keywords: Globalization; ICT; labor demand; Outsourcing; productivity; R&D; skill augmenting; Skill bias; STEM skills; techies
    JEL: D2 D24 F1 F16 F6 F66 J2 J23 J24 O52
    Date: 2021–02
  5. By: Dr. Cesar R Salas-Guerra
    Abstract: At present, the economic measurement of the national statistical offices has not defined or captured the benefits of the digital economy activity due to the low quality or inexistence of methodologies. Currently, there is a relevant debate on the capacity of the digital economy activity to generate productivity, economic growth, and well-being through innovation and knowledge. For this reason, this research identified and studied specialized knowledge, human settlement, and digital economic activity as the factors that influence regional economic growth. As a result, the impact generated by a new business operating models based on information technology was measured. Furthermore, this research used an empirical measurement model that made it possible to identify certain phenomena such as regional poles of regional economic development (PRDE) that surround economically flourishing regions. In addition, it showed that municipalities with high degrees of economic growth were impacted by digital economic activity and specialized knowledge. This finding is consistent with economic growth theories that point to technological evolution as the main factor of modern economic growth. Consequently, this study contributed beneficial results to the local government to develop strategies framed in solving industrial cooperation of economically flourishing regions with their neighbors, facing the problem of agglomeration of resources and capital reflected in human settlement promote an imbalance in economic growth and social development.
    Date: 2021–05
  6. By: Core, Fabrizio; De Marco, Filippo
    Abstract: This paper investigates whether the private sector can efficiently allocate public funds during a crisis. Using loan-level data, we exploit the unique features of the Italian public guarantee scheme during Covid-19 to study lenders' incentives to distribute government guaranteed credit. Our results indicate that two key bank characteristics facilitated loan disbursement: size and information technology. These factors are important because of the high volume of online applications and low interest margins on guaranteed lending. Pre-existing relationships matter for the allocation of guaranteed credit, as banks lend more in their core markets and where they have a larger share of local branches.
    Keywords: COVID-19; Information Technology; Lending relationships; liquidity constraints; public guarantees
    JEL: G21 G28
    Date: 2021–02

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