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on Information and Communication Technologies |
| By: | Hans K. Hvide; Tom G. Meling; Magne Mogstad; Ola L. Vestad |
| Abstract: | We study the effects of broadband internet use on the investment decisions 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 tilt their portfolios towards funds, thereby obtaining more diversified portfolios and higher Sharpe ratios, and do not increase their trading activity in stocks. Overall, access to high-speed internet seems to spur a “democratization of finance”, with individuals making investment decisions that are more in line with the advice from portfolio theory. |
| JEL: | D04 D14 D15 G00 G11 G40 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30383&r= |
| By: | Gerten, Elisa (University of Cologne); Beckmann, Michael (University of Basel); Kräkel, Matthias (University of Bonn) |
| Abstract: | In recent decades, information and communication technology (ICT) has been associated with far-reaching changes in the design of jobs. However, it still remains unclear whether these changes will lead to more centralization or more decentralization in firms. Previous literature on this debate has focused on a strict dichotomy between the two possible directions. In contrast, our theoretical and empirical analyses show that equipping employees with ICT leads to both more centralized and more decentralized job-design policies. This finding is particularly pronounced for executive employees, who are granted more work autonomy but also experience more control via stronger monitoring, while non-executive employees only experience more monitoring without receiving more work autonomy. Our theoretical setting is based on a modified principal-agent model. In our empirical approach we apply estimation models that account for both endogeneity and essential heterogeneity, thereby exploiting exogenous geographic variation in our instrumental variable. |
| Keywords: | information and communication technology, centralization, decentralization, monitoring, working from home, marginal treatment effects, essential heterogeneity, instrumental variable |
| JEL: | D2 D86 J3 M1 M5 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15491&r= |
| By: | Brian McManus; Aviv Nevo; Zachary Nolan; Jonathan W. Williams |
| Abstract: | We study trade-offs faced by multiple-system operators (MSOs), the gatekeepers in the provision of internet service, when setting prices and quality for internet access and TV service. In response to improvements in over-the-top video (OTT), MSOs choose between accommodating OTT to share in the surplus it provides consumers, or steering consumers towards TV. We augment the standard mixed bundling model to show that in some cases MSOs have incentives to steer consumers towards TV, but that these incentives vary with the available pricing tools. We then estimate the distribution of model parameters using household panel data on subscription choices and internet usage. Our estimates imply that if MSOs can set different prices for different internet content, under many cost circumstances MSOs discount the OTT usage price. Furthermore, we find that the ability to charge prices based on internet usage strengthens the MSOs' incentive to improve OTT quality. |
| JEL: | L11 L13 L96 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30399&r= |
| By: | Otrachshenko, Vladimir; Popova, Olga; Nikolova, Milena; Tyurina, Elena |
| Abstract: | We theoretically and empirically examine how acquiring new skills and increased financial worries influenced entrepreneurship entry and exit intentions during the pandemic. To that end, we analyze primary survey data we collected in the aftermath of the COVID-19's first wave in Russia, which has had one of the highest COVID-19 infection rates globally. Our results show that acquiring new skills during the pandemic helps maintain an existing business and encourages start-ups in sectors other than information technology (IT). For IT start-ups, having previous experience matters more than new skills. While the pandemic-driven financial worries are associated with business closure intentions, they also inspire new business start-ups, highlighting the creative destruction power of the pandemic. Furthermore, preferences for formal employment and remote work also matter for entrepreneurial intentions. Our findings enhance the understanding of entrepreneurship formation and closure in a time of adversity and suggest that implementing entrepreneurship training and upskilling policies during the pandemic can be an important policy tool for innovative small business development. |
| Keywords: | business entry,information technology (IT),business closure,COVID-19,entrepreneurship intentions,self-employment,Russia |
| JEL: | E24 J24 L26 P20 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1153&r= |
| By: | Zhiguo He; Sheila Jiang; Douglas Xu; Xiao Yin |
| Abstract: | This paper studies the economics behind the investment in information technologies (IT) by U.S. commercial banks in the past decade. By linking banks’ IT spending to their lending technologies, we analyze the distinctive natures of banks’ dealings with information across various lending activities. Investment in communication IT is shown to be associated more with improving banks’ ability of soft information production and transmission, while investment in software IT helps enhance banks’ hard information processing capacity. We exploit polices that affect geographic regions differentially to show causally that banks respond to an increased demand for small business credit (mortgage refinance) by increasing their spending on communication (software) IT spending. We also find that the entry of fintech induces commercial banks to increase their investment in IT—more so in the software IT category. |
| JEL: | G21 G51 O12 O32 |
| Date: | 2022–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:30403&r= |