nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2022‒07‒25
seven papers chosen by
Marek Giebel
Universität Dortmund

  1. Information technology,income inequality and economic growth in Sub-Saharan African countries By Odhiambo, Nicholas M
  2. Enhancing ICT for female economic participation in SuB-Saharan Africa By Asongu, Simplice A; Odhiambo, Nicholas M
  3. The Early Roots of the Digital Divide: Socioeconomic Inequality in Children’s ICT Literacy from Primary to Secondary Schooling By Giampiero Passaretta; Carlos J. Gil-Hernández
  4. Foreign direct investment, information technology and total factor productivity dynamics in Sub-Saharan Africa By Asongu, Simplice A; Odhiambo, Nicholas M
  5. Comparative Advantages in the Digital Era – A Heckscher-Ohlin-Vanek Approach By Dario Guarascio; Roman Stöllinger
  6. Informational Barriers to Market Access: Experimental Evidence from Liberian Firms By Jonas Hjort; Vinayak Iyer; Golvine de Rochambeau
  7. Hidden Stagflation By Takahashi, Yuta; Takayama, Naoki

  1. By: Odhiambo, Nicholas M
    Abstract: In this paper, the dynamic relationship between ICT, income inequality and economic growth in sub-Saharan African (SSA) countries is examined during the period 2004-2014. Three ICT and three income inequality indicators were used to examine this linkage. The ICT indicators used include internet penetration, mobile phone penetration and fixed broadband subscription, while the income inequality indicators include the Gini coefficient, the Atkinson index and the Palma ratio. Using the Generalised Method of Moments (GMM) estimation technique, the study found that, on the whole, an increase in ICT development unconditionally leads to an increase in economic growth in the countries under study. The study also found that the threshold level of income inequality, which should not be exceeded in order for the positive impact of ICT on economic growth to be sustained, depends on the ICT proxy used and the income inequality indicator. Specifically, the study found that for ICT to have a sustained positive impact on economic growth, i) the Gini coefficient in the mobile penetration specification should not exceed 0.520; ii) the Gini coefficient and Atkinson index in the internet penetration specification should not exceed 0.531 and 0.560, respectively; and iii) the Gini coefficient, Atkinson index and Palma ratio in the fixed broadband subscriptions should not exceed 0.551, 0.633 and 4.664, respectively. Policy implications are discussed.
    Date: 2022–05
  2. By: Asongu, Simplice A; Odhiambo, Nicholas M
    Abstract: This study investigates how enhancing information and communication technology (ICT) affects female economic participation in sub-Saharan African nations. Three female economic participation indicators are used, namely female labor force participation, female unemployment and female employment rates. The engaged ICT variables are: fixed broadband subscriptions, mobile phone penetration and internet penetration. The Generalized Method of Moments is used for the empirical analysis. The following main findings are established: First, there is a (i) negative net effect in the relevance of fixed broadband subscriptions in female labour force participation and female unemployment and; (ii) positive net effects from the importance of fixed broadband subscriptions on the female employment rate. Secondly, an extended analysis is used to establish thresholds at which the undesirable net negative effect on female labour force participation can be avoided. From the corresponding findings, a fixed broadband subscription rate of 9.187 per 100 people is necessary to completely dampen the established net negative effect. Hence, the established threshold is the critical mass necessary for the enhancement of fixed broadband subscriptions to induce an overall positive net effect on the female labour force participation rate.
    Keywords: Africa; Gender; ICT; Inclusive development; Technology
    Date: 2022–03
  3. By: Giampiero Passaretta (Stockholm University Demography Unit (SUDA)); Carlos J. Gil-Hernández (European Commission - JRC)
    Abstract: Information and communications technology (ICT) skills are crucial for labour market success and full participation in society. Socioeconomic status (SES) inequality in the development of ICT skills would prevent disadvantaged children from reaping the benefits of the digital age. Besides, the digital divide in ICT literacy might add to the already well-documented large and persistent SES inequality in ‘hard’ skills—like math, reading, and science. This article studies the roots, evolution, and drivers of SES inequality in ICT literacy from age 8 to 15 in Germany. Drawing from the German National Educational Panel Study (NEPS), we highlight five main findings: (1) SES gaps in ICT literacy exist as early as age 8 (grade 3) and are similar in size compared to SES gaps in hard skills; (2) like hard skills, SES gaps in ICT literacy remain stable over primary and tracked lower secondary schooling; (3) ICT access and use at home and school do not substantially explain SES gaps in ICT literacy at any age; (4) selection into school tracks seems a critical pathway, although not necessarily a causal one, leading to SES inequality in secondary school; (5) SES gaps in ICT literacy are not observed among children with similar levels of hard skills. We discuss the implications of these findings for the interdisciplinary literature on social stratification, skill formation, and the digital divide.
    Keywords: digital skills, ICT literacy, socioeconomic status inequality, educational inequality, digital divide, Germany
    Date: 2022–06
  4. By: Asongu, Simplice A; Odhiambo, Nicholas M
    Abstract: Compared to other regions of the world, the potential for information technology penetration in sub-Saharan Africa (SSA) is very high. Unfortunately, productivity levels in the region are also very low. This study investigates the importance of information technology in influencing the effect of foreign direct investment (FDI) on total factor productivity (TFP) dynamics. The focus is on 25 countries in SSA. Information technology is measured with mobile phone penetration and internet penetration, while the engaged TFP productivity dynamics are TFP, real TFP, welfare TFP, and real welfare TFP. The empirical evidence is based on the Generalised Method of Moments. The findings show that, with the exception of regressions pertaining to real TFP growth for which the estimations do not pass post-estimation diagnostic tests, it is apparent that information technology (i.e. mobile phone penetration and internet penetration) modulate FDI to positively influence TFP dynamics (i.e. TFP, welfare TFP, and welfare real TFP). Policy and theoretical implications are discussed.
    Keywords: Productivity; Foreign Investment; Information Technology; Sub-Saharan Africa
    Date: 2022–02
  5. By: Dario Guarascio; Roman Stöllinger
    Abstract: This paper revisits the Heckscher-Ohlin-Vanek (HOV) theorem and investigates its fit for digital tasks and ICT capital, which both represent endowment factors that are expected to shape the digital transformation. We use a theory-consistent methodology for calculating the measured net factor content of trade (Trefler and Zhu, 2010) and apply it to a unique dataset on digital and non-digital tasks performed in detailed occupations, as well as recent data on ICT capital stocks. Equipped with these data we provide new evidence on the factor-based trade patterns for 25 EU countries and use it to test the HOV theorem. Overall, the performance of the sign test and the rank test is good if not impressive. In 83% of the cases countries are net exporters of those factors with which they are abundantly endowed, with a higher score achieved for digital tasks than for ICT capital. We conclude that the fit of the HOV theorem for highly relevant endowments of the digital era is as good as that of traditional endowment factors
    Keywords: Heckscher-Ohlin-Vanek theorem; factor content of trade; comparative advantages; digital tasks; ICT capital
    JEL: F11 F14 D57
    Date: 2022–06
  6. By: Jonas Hjort (Columbia University [New York], CEPR - Center for Economic Policy Research - CEPR); Vinayak Iyer (Columbia University [New York]); Golvine de Rochambeau (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Evidence suggests that firms in poor countries stagnate because they cannot access growth-conducive markets. We hypothesize that overlooked heterogeneity in marketing ability distorts market access. To investigate, we gave a random subset of Liberian firms vouchers for a week-long program that teaches how to sell to corporations, governments, and other large buyers. Firms that participate win about three times as many contracts, but only firms with access to the Internet benefit. We use a simple model and variation in online and offline demand to show evidence that this is because ICT dampens traditional information frictions, but not marketing barriers.
    Date: 2020–09
  7. By: Takahashi, Yuta; Takayama, Naoki
    Abstract: We present evidence that the rise in inflation in Japan since 2014 is a result of a hidden stagflation: the relative prices of durable consumption and ICT investment goods stopped declining, reflecting technology stagnation and exerting an inflationary pressure on the economy and; the real side of the Japanese economy simultaneously started stagnating even further. We construct a multi-good monetary model to account for these facts together and quantify the impact of the technology stagnation on the aggregate inflation rate. We develop a new sign restriction approach to construct informative lower bounds to the impact of the technology stagnation on long-run inflation without relying on the exact Euler equation and some of the balanced growth path properties. By using the lower bounds, we find that inflation would be close to 0% or even negative without the technology stagnation. Moreover, the technology stagnation explains a sizable fraction of the observed slowdown in the real GDP and consumption growth. Our findings challenge the conventional view that Japan emerged from long-lasting deflation owing to the unconventional monetary policies. Finally, we apply our analysis to European countries and uncover the hidden stagflation there as well.
    JEL: E31 E43 E52 E58
    Date: 2022–07

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