nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2022‒10‒17
eight papers chosen by
Marek Giebel
Universität Dortmund

  1. 100 years of rising corporate concentration By Kwon, Spencer Y.; Ma, Yueran; Zimmermann, Kaspar
  2. Evaluating the effects of ICT core elements on CO2 emissions: Recent evidence from OECD countries By Briglauer, Wolfgang; Köppl-Turyna, Monika; Schwarzbauer, Wolfgang
  3. Let's Switch to the Cloud: Cloud Adaption and Its Effect on IT Investment and Productivity By Tomaso Duso; Alexander Schiersch
  4. Searching for Sustainable Footprints: Does ICT increase CO2 emissions? By Olatunji A. Shobande; Simplice A. Asongu
  5. An urban-rural divide (or not?): Small firm location and the use of digital technologies By Thomä, Jörg
  6. Does E-governance reduce income inequality in sub-Saharan Africa? Evidence from a dynamic panel By Toyo Amègnonna Marcel Dossou; Emmanuelle Ndomandji Kambaye; Mesfin Welderufael Berhe; Simplice A. Asongu
  7. Determinants of the Digital Divide: Evidence from France By Mathilde Aubouin
  8. Technological Change and the Finance Wage Premium By Ata Can Bertay; Jose Gabo Carreno; Harry Huizinga; Burak Uras; Nathanael Vellekoop

  1. By: Kwon, Spencer Y.; Ma, Yueran; Zimmermann, Kaspar
    Abstract: We collect data on the size distribution of all U.S. corporate businesses for 100 years. We document that corporate concentration (e.g., asset share or sales share of the top 1%) has increased persistently over the past century. Rising concentration was stronger in manufacturing and mining before the 1970s, and stronger in services, retail, and wholesale after the 1970s. Furthermore, rising concentration in an industry aligns closely with investment intensity in research and development and information technology. Industries with higher increases in concentration also exhibit higher output growth. The long-run trends of rising corporate concentration indicate increasingly stronger economies of scale.
    Keywords: Corporate concentration,economies of scale
    JEL: E23 E01 N12
    Date: 2022
  2. By: Briglauer, Wolfgang; Köppl-Turyna, Monika; Schwarzbauer, Wolfgang
    Abstract: Digitization-related services and applications are based on the information and communications technology (ICT) ecosystem and encompass almost all areas of society and economic sectors nowadays and exert numerous opposing effects in regard to electricity consumption and corresponding CO2 emissions. Our analysis aims to inform policy decision makers about the actual climate relevance of the ICT ecosystem by providing sound empirical evidence on the net effect of various ICT core elements based on recent OECD panel data utilizing panel econometric estimation methods that include instrumental variables. We found that the CO2-reducing positive indirect effects seem to outweigh the negative, in other words, CO2-increasing direct and indirect effects on average. Specifically, we found that, in addition to the lowering effect related to the use of basic broadband connections, there was another lowering effect-albeit smaller-related to new fiber-based broadband connections. In contrast, other elements of the ICT ecosystem, such as mobile broadband networks or electronic end-user devices, showed no significant net impact on CO2 emissions. Our main findings suggest that broadband networks can give rise to positive environmental effects for society. We conclude that undifferentiated climate policy measures imposed on the ICT ecosystem would not do justice to the identified heterogeneity, with numerous in part opposing effects, and likely would be accompanied by inefficiencies and market distortions.
    Keywords: ICT,digitization,CO2 emissions,electricity consumption,OECD data,panel econometrics
    JEL: L52 L96 Q40 Q55
    Date: 2022
  3. By: Tomaso Duso; Alexander Schiersch
    Abstract: The advent of cloud computing promises to improve the way firms utilize IT solutions. Firms are expected to replace large and inflexible fixed-cost investments in IT with more targeted variable spending in cloud solutions. In addition, cloud usage is expected to increase the productivity of firms, as it allows them to quickly customize the IT they require to their specific needs. We assess these assertions using data on a representative sample of firms provided by the German statistical offices for the years 2014 and 2016, which allows to observe who are the cloud users. Our analysis explicitly accounts for the self-selection into cloud adoption within an endogenous treatment regression framework. Broadband availability at the municipality level is used as an exogenous shifter for cloud usage. We show that, while cloud adoption does not impact IT investment in any sectors, it does significantly improve labor productivity for firms in manufacturing and in information and communication services.
    Keywords: Cloud computing, investment, productivity, IT, substitution, firm performance
    JEL: D24 D25 L60 L80 O14 O33
    Date: 2022
  4. By: Olatunji A. Shobande (Teesside University, UK); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: Generally, the revolutionary idea behind using information and communication technology (ICT) has improved potential productivity in many industries, particularly in Africa. ICT is an essential tool in the oil and gas industry and plays a complementary role in technological dynamics and cross-sectoral productivity. For the educational sector, ICT facilitates research and development as well as in imparting knowledge. ICT remains the password to essential inputs required for any given output in terms of improved productivity and economic development. With regard to employment creation, ICT accounts for more than 50% of employment globally. Despite the significant role of ICT in the economy, evidence shows that more than 90% of carbon emissions have been linked to ICT production, installation, and usage. This study aims to determine whether ICT causes environmental sustainability in Nigeria and South Africa. The methodological contribution of the study lies in combining the STIRPAT framework and time series based on the VAR/VEC Granger causality, enabling the study to uncouple the dynamic interaction among environmental sustainability indicators. The findings show that ICT has contributed to South Africa's environmental sustainability, whereas evidence in Nigeria is relatively mixed. Therefore, the study recommends the urgent need to provide intervention programs tailored toward investing in environmental infrastructure to mitigate the threat of climate change in Nigeria.
    Keywords: CO2 emissions; ICT; Economic development; Sub-Saharan Africa
    JEL: C52 O38 O40 O55 P37
    Date: 2022–01
  5. By: Thomä, Jörg
    Abstract: Regarding the spatial impact of digitalization, the concern is often expressed that rural areas and the companies located there are disadvantaged by a digital divide compared to urban regions. Against this background, this paper explores the role of the urban/rural location of a small firm in the use of digital communication and information technologies (ICT). With the help of a cluster analysis approach, different modes of digitalization in the German small enterprise sector are identified. According to this, four groups of small firms can be distinguished in accordance to the maturity level concept of digital transformation: non-digital firms, digital beginners, platform-oriented firms and digital manufacturers. From a spatial perspective, it can be seen that the members of the platform-oriented group are relatively often located in urban regions, whereas the digital manufacturers are relatively often found in rural areas. These findings are interpreted as an indication that small firms at least partially consciously assign themselves to one of these digitalization modes, depending on which business model is most effective in the respective (urban or rural) business environment. By contrast, whether a small firm has not yet done anything in terms of digitalization or is only at the beginning of the digital transformation process does not significantly depend on the location of the company. The paper concludes with implications for policy and research.
    Keywords: Digitalization,Rural regions,Digital divide,Urban-rural typology,SMEs
    JEL: D22 O33 R11 R12
    Date: 2022
  6. By: Toyo Amègnonna Marcel Dossou (Chengdu, China.); Emmanuelle Ndomandji Kambaye (Chengdu, China.); Mesfin Welderufael Berhe (Chengdu, China.); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: The ICT-income inequality relationship and the governance quality-income inequality nexus have been investigated in recent years. However, the moderating effect of ICT on the governance quality-income inequality linkage has been largely ignored. To fill this gap in the literature, this study examines the moderating effect of ICT on the relationship between governance quality and income inequality for a panel of 42 sub-Saharan African economies over the period 1996-2020. To achieve this goal, the generalized method of moments (GMM) estimation technique has been adopted. The results reveal that while ICT contributes to the improvement of income distribution, governance quality contributes to the exacerbation of income inequality. Interestingly, the results unveil that the promotion of E-governance could contribute to improve social welfare and reduce income inequality. ICT thresholds at which the positive incidence of governance on income inequality is completely nullified is for governance effectiveness and 19.7 for regulatory quality. Policy implications are given based on the findings of this study.
    Keywords: ICT, governance quality, income inequality, GMM, sub-Saharan Africa
    Date: 2022–01
  7. By: Mathilde Aubouin
    Abstract: The COVID-19 crisis accelerated the digital transition and reinforced households' existing digital divide. This paper aims to identify determinants of digital inequalities in access, usage, and type of usage in France and the reasons for the non-access to the internet. Using French Institute of Statistics (INSEE) surveys between 2007 and 2019, we show that generation, education, and income are significant determinants of digital consumption. The gender digital gap exists only among older generations. The digital divide is mainly a problem of internet access in France. Disparities in usage narrow once an individual has access to and uses the internet. Based on our results, we recommend investing in digital education and implementing financial support to reduce the digital divide.
    Keywords: Digital Divide; Internet use; Internet access; Pseudo-panel methods; France
    JEL: L86 L96 O33
    Date: 2022
  8. By: Ata Can Bertay; Jose Gabo Carreno; Harry Huizinga; Burak Uras; Nathanael Vellekoop
    Abstract: This paper utilizes a comprehensive worker-firm panel for the Netherlands to quantify the impact of ICT capital-skill complementarity on the finance wage premium after the Global Financial Crisis. We apply additive worker and firm fixed-effect models to account for unobserved worker- and firm-heterogeneity and show that firm fixed-effects correct for a downward bias in the estimated finance wage premium. Our results indicate a sizable finance wage premium for both fixed- and full-hourly wages. The complementarity between ICT capital spending and the share of high skill workers at the firm-level reduces the full-wage premium considerably and the fixed-wage premium almost entirely.
    Keywords: finance wage premium, worker-firm panels, skill-biased technological change
    JEL: G20 J24 J31 O33
    Date: 2022–10–01

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