nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2022‒11‒21
five papers chosen by
Marek Giebel
Universität Dortmund

  1. On the Elasticity of Substitution between Labor and ICT and IP Capital and Traditional Capital By Vahagn Jerbashian
  2. Quality of Communications Infrastructure, Local Structural Transformation, and Inequality By Camilo Andrés Acosta Mejía, Luis Baldomero-Quintana
  3. Risk Management in Border Inspection By Hillberry,Russell Henry; Karabay,Bilgehan; Tan,Shawn Weiming
  4. Social Media and Newsroom Production Decisions By Julia Cagé; Nicolas Hervé; Béatrice Mazoyer
  5. Why Do Firms Pay Bribes ? Evidence on the Demand and Supply Sides of Corruption in Developing Countries By Gauthier,Bernard P.; Goyette,Jonathan; Kouame,Wilfried Anicet Kouakou

  1. By: Vahagn Jerbashian
    Abstract: I estimate CES aggregate production functions for the US, the UK, Japan, Germany, and Spain using data from the EU KLEMS database. I distinguish between three types of capital: information and communication technologies (ICT), intellectual property (IP) capital, and traditional capital. I assume that the aggregate output is produced using labor and these three types of capital and allow for differences in the elasticities of substitution between labor, an aggregate of ICT and IP capital, and traditional capital. The estimated elasticities of substitution between ICT and IP capital are strictly below one for all sample countries implying gross complementarity. ICT and IP capital together are gross substitutes for labor while traditional capital is a gross complement. The results for the US imply that the fast pace of technological progress in ICT and IP capital accumulation together are responsible for about 80 percent of the fall in labor income share.
    Keywords: CES production function, elasticities of substitution, system of equations, ICT, IP capital, traditional capital
    JEL: E22 E25 J23 O33
    Date: 2022
  2. By: Camilo Andrés Acosta Mejía, Luis Baldomero-Quintana
    Abstract: We document that improvements in the quality of communication infrastructure have a causal impact in employment growth, wage inequality, and sectoral economic activity in US counties. Our treatment is the quality of communication infrastructure in a county measured by the av erage Internet speeds offered by telecommunication companies. For identification, we use as instrumental variable the structure of ARPANET (the precursor of Internet), a network funded by the Department of Defense, whose information we retrieved from historical government doc uments. We show that faster Internet increases the shares of employment in high skilled services sectors, while negatively affecting activity in services sectors like retail, accommodation and food services. Two mechanisms explain our results: input-output linkages and a rise in high-skilled workers in ICT-intensive occupations. Our results are consistent with the Rybczynski theorem. Lastly, our results suggest that reduction in communication costs induced by better Internet in U.S. counties increases local inequality.
    Keywords: Communication costs, Internet, infrastructure, local structural transformation, Hecksher-Ohlin-Vanek model, history of technology
    Date: 2022–10–18
  3. By: Hillberry,Russell Henry; Karabay,Bilgehan; Tan,Shawn Weiming
    Abstract: As part of their commitments under the World Trade Organization's Agreement on Trade Facilitation, many developing countries are set to adopt risk management, a strategy for selecting import shipments for inspection. This paper formalizes key enforcement issues related to risk management. It argues that the complexities of international trade oversight mean that inspecting agencies lack certainty about the conditional probability that a given shipment will not comply with import regulations. Ambiguity of this sort is likely to be especially important in developing countries that lack the sophisticated information technology used in advanced risk management systems. This paper formalizes a role for ambiguity in a theoretical model of border inspection. It provides evidence suggesting that ambiguity affects inspection rates. Finally, the paper calibrates the model and shock the ambiguity parameters to illustrate the consequences of an information technology-driven improvement in risk management capabilities for equilibrium rates of search and compliance.
    Keywords: International Trade and Trade Rules,Information Technology,Trade Facilitation,Financial Sector Policy,Human Rights
    Date: 2020–10–14
  4. By: Julia Cagé (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, CEPR - Center for Economic Policy Research - CEPR); Nicolas Hervé (INA - Institut National de l'Audiovisuel); Béatrice Mazoyer (Médialab - Médialab (Sciences Po) - Sciences Po - Sciences Po)
    Abstract: Social media affects not only the way we consume news, but also the way news is produced, including by traditional media outlets. In this paper, we study the propagation of information from social media to mainstream media, and investigate whether news editors' editorial decisions are influenced by the popularity of news stories on social media To do so, we build a novel dataset including a representative sample of all the tweets produced in French between August 1st 2018 and July 31st 2019 (1.8 billion tweets, around 70% of all tweets in French) and the content published online by 200 mainstream media outlets. We then develop novel algorithms to identify and link events on social and mainstream media. To isolate the causal impact of popularity, we rely on the structure of the Twitter network and propose a new instrument based on the interaction between measures of user centrality and "social media news pressure" at the time of the event. We show that story popularity has a positive effect on media coverage, and that this effect varies depending on the media outlets' characteristics, in particular on whether they use a paywall. Finally, we investigate consumers' reaction to a surge in social media popularity. Our findings shed new light on our understanding of how editors decide on the coverage for stories, and question the welfare effects of social media.
    Keywords: Internet,Information spreading,News editors,Network analysis,Social media,Twitter,Text analysis
    Date: 2022–05–31
  5. By: Gauthier,Bernard P.; Goyette,Jonathan; Kouame,Wilfried Anicet Kouakou
    Abstract: This paper empirically examines the demand and supply sides of bribery using World Bank Enterprise Survey data on 18,005 firms in 75 developing countries. It assesses the determinants of firms' bribe paying behavior and examine how bribe behavior affects two main sectors where corruption is rampant: taxation and government contracts. The paper shows that corruption in tax administration tends to be mainly a demand-side phenomenon. Paying a bribe requested by a public official is associated with a 16 percent increase in the share firms' sales not reported for tax purposes. In public procurement, the results suggest, on the contrary, that corruption is a supply-side phenomenon, with bribe transactions generally initiated by firms to secure public contracts. Firms supplying a bribe without a previous request by officials is associated with a 17 percent increase in the bribe paid to secure a government contract, more than three times the effect observed on the demand side of bribery.
    Keywords: Tax Law,Economic Adjustment and Lending,Taxation&Subsidies,Macro-Fiscal Policy,International Trade and Trade Rules,Tax Administration,Public Sector Economics,Public Finance Decentralization and Poverty Reduction,Information Technology
    Date: 2020–10–19

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