nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2023‒07‒17
six papers chosen by
Marek Giebel
Universität Dortmund

  1. Epidemic exposure, financial technology, and the digital divide By Saka, Orkun; Eichengreen, Barry; Aksoy, Cevat
  2. Information and Communication Technology and Firm Geographic Expansion By Xian Jiang
  3. Techies and Firm Level Productivity By James Harrigan; Ariell Reshef; Farid Toubal
  4. ICT, Online Search Behavior, and Remittances: Evidence from the Kyrgyz Republic By Roland-Holst, David; Karymshakov, Kamalbek; Sulaimanova, Burulcha; Sultakeev, Kadyrbek
  5. German industrial policy and the twin transition: Pre- and post-Covid trajectories in the automotive and IT services sectors By Topuria, Salome; Gräf, Helena
  6. Digitalisation and labour markets in developing countries By Fietz, Katharina; Lay, Jann

  1. By: Saka, Orkun; Eichengreen, Barry; Aksoy, Cevat
    Abstract: We ask whether epidemic exposure leads to a shift in financial technology usage and who participates in this shift. We exploit a dataset combining Gallup World Polls and Global Findex surveys for some 250, 000 individuals in 140 countries, merging them with information on the incidence of epidemics and local 3G internet infrastructure. Epidemic exposure is associated with an increase in remote-access (online/mobile) banking and substitution from bank branch-based to ATM activity. The temporary nature of the effects we identify is more consistent with a demand channel rather than that of supply with high initial fixed costs. Exploring heterogeneity using a machine-learning driven approach, we find that young, high-income earners in full-time employment have the greatest tendency to shift to online/mobile transactions in response to epidemics. Baseline effects are larger for individuals with better ex ante 3G signal coverage, highlighting the role of the digital divide in adaption to new technologies necessitated by adverse external shocks.
    Keywords: epidemics; fintech; banking
    JEL: G20 G00 I10
    Date: 2022–04–01
  2. By: Xian Jiang
    Abstract: This paper studies how information and communication technology (ICT) affects the firm geographic organization and its implications on aggregate efficiency. ICT can widen firms’ geographic span of control by reducing their internal communication costs. Empirical evidence from confidential US Census data shows that firms with more advanced technology have both higher within-firm communication and larger geographic coverage. I then develop a quantitative spatial equilibrium model in which firms endogenously adopt ICT, choose multiple production locations, and trade domestically. I estimate the model by exploiting natural experimental variation from the Internet privatization of the early 1990s. The model quantifies that privatization led to an overall efficiency gain of 1.3%, two-fifths of which came from firm geographic expansion. The distribution of these gains across locations is shaped by multi-unit firms’ location choices. Policy simulations show that, in reducing the digital gap, a coordinated national policy leads to larger efficiency gains than local policies.
    Keywords: information and communication technology, firm organization, geography
    JEL: D24 F12 O33 R30 L23
    Date: 2023
  3. By: James Harrigan; Ariell Reshef; Farid Toubal
    Abstract: We study the impact of techies—engineers and other technically trained workers—on firm-level productivity. We first report new facts on the role of techies in the firm by leveraging French administrative data and unique surveys. Techies are STEM-skill intensive and are associated with innovation, as well as with technology adoption, management, and diffusion within firms. Using structural econometric methods, we estimate the causal effect of techies on firm-level Hicks-neutral productivity in both manufacturing and non-manufacturing industries. We find that techies raise firm-level productivity, and this effect goes beyond the employment of R&D workers, extending to ICT and other techies. In non-manufacturing firms, the impact of techies on productivity operates mostly through ICT and other techies, not R&D workers. Engineers have a greater effect on productivity than technicians.
    Keywords: productivity, R&D, ICT, techies, STEM skills
    JEL: D20 D24 F10 F16 F60 F66 J20 J23 J24 O52
    Date: 2023
  4. By: Roland-Holst, David (Asian Development Bank Institute); Karymshakov, Kamalbek (Asian Development Bank Institute); Sulaimanova, Burulcha (Asian Development Bank Institute); Sultakeev, Kadyrbek (Asian Development Bank Institute)
    Abstract: Infrastructure has always been a fundamental driver of long-term economic growth, but in recent decades information and communication technology (ICT) has supported and accelerated the growth of the global economy in ways beyond the imagining of our ancestors. We examine the role of ICT infrastructure in facilitating labor markets' access and remittance flows for workers from the Kyrgyz Republic. Using a combination of traditional high frequency macroeconomic data and real time internet search information from Google Trends, we take a novel approach to explaining the inflow of remittances to a developing country. In the first attempt to model remittance behavior with GTI data in this context, we use a gravity model. We also attempt to account for both origin and destination labor market conditions, using Kyrgyz language search words to identify both push and pull factors affecting migrant decisions.
    Keywords: migration; remittances; infrastructure; internet
    JEL: F22 F24 L86 O18 O33
    Date: 2022–12
  5. By: Topuria, Salome; Gräf, Helena
    Abstract: The European Union (EU) and Germany were already being confronted with rapidly changing dynamics on the economic, ecological, and technological terrains prior to the Covid-19 crisis. The pandemic however has fully exposed critical global value chain (GVC) dependencies, jeopardising European industries. Yet, while the automotive industry was directly hit and worsened by the GVC distortions, the information technology (IT) services sector increased in value. By employing a historical-institutional and a pre-and post- Covid-19 industrial policy analysis, this article finds that in spite of previous attempts, it was during the height of the pandemic that the implementation of green and digital industrial policy gained significant political support in Germany and the EU. In this context, there is an increased relevance of vertical industrial policy, which is geared towards the 'twin transition', partly altering the primarily horizontal industrial policy framework manifested in the post-Maastricht period.
    Keywords: Vertical Industrial Policy, Automotive industry, IT services industry, Covid-19, Geopoliticized Competition, Twin Transition
    JEL: L5 L62 O38
    Date: 2023
  6. By: Fietz, Katharina; Lay, Jann
    Abstract: Digitalisation has a major impact on labour markets in developing countries. While Internet access expands, digital platforms proliferate and "gig-work" is performed in the Global South, access to and use of digital technologies remains far from universal. As the scope and speed of digitalisation vary across countries and "context matters". The present study reviews the evidence on the effects that selected key aspects of digitalisation on labour markets in developing economies with a focus on digital platforms. Although several studies find considerable effects regarding the employment impacts of digital infrastructures, the evidence on the impacts of digital platforms remains relatively patchy. For example, while transaction data from global online labour platforms demonstrate the important role of the Global South as a supplier on online platforms, we know very little about the extent of work on location-based online platforms. We discuss digital skills to harness digitalisation gains and identify several evidence gaps.
    Keywords: Digitalisation, labour markets, employment, digital platforms, digital skills
    JEL: O14 O33 E24 J21
    Date: 2023

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