nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2023‒12‒18
six papers chosen by
Marek Giebel, Universität Dortmund

  1. State Aid, R&D, and the Digital Content of Trade By Chiara Castelli; Dario Guarascio; Stefan Jestl; Robert Stehrer
  2. Enhancing ICT for Female Economic Participation in Sub-Saharan Africa By Asongu, Simplice; Odhiambo, Nicholas
  3. Germany's Energiewende: Synergies, trade-offs and political drivers By Faus Onbargi, Alexia; Dombrowsky, Ines
  4. Foreign Direct Investment, Information Technology and Total Factor Productivity Dynamics in Sub-Saharan Africa By Asongu, Simplice; Odhiambo, Nicholas
  5. ICT and agriculture in Sub-Saharan Africa: effects and transmission channels By Noubissi Domguia, Edmond; Asongu, Simplice
  6. The Critical Role of Education and ICT in Promoting Environmental Sustainability in Eastern and Southern Africa: A Panel VAR Approach By Shobande, Olatunji; Asongu, Simplice A

  1. By: Chiara Castelli (The Vienna Institute for International Economic Studies, wiiw); Dario Guarascio; Stefan Jestl (The Vienna Institute for International Economic Studies, wiiw); Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: We test for the role of state aid as a driver of digital competitiveness at the industry level, focusing on the digital factor content of trade. Results show that state aid may increase digital competitiveness, particularly in R&D-intensive industries and in relation to the export of (digital) capital-intensive goods and services. Interestingly, aggregate state aid appears to be more effective than specific R&D funds in explaining the performance of country-industries in foreign markets.
    Keywords: Factor content of trade, ICT capital, state aid, sectoral R&D capability
    JEL: F14 O30
    Date: 2023–11
  2. By: Asongu, Simplice; Odhiambo, Nicholas
    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
    JEL: G20 I10 I32 O40 O55
    Date: 2022–01–02
  3. By: Faus Onbargi, Alexia; Dombrowsky, Ines
    Abstract: Farmers have started to adopt information and communication technology (ICT), which has considerable potential to impact farm performance. This study uses data from a 2018 survey of 763 vegetable smallholder farms in China to estimate the impact of ICT on technical efficiency (TE). We adopt propensity score matching to create a balanced sample of ICT users and non-users and a stochastic frontier model with sample selection correction to compare the two groups' TE. After accounting for self-selection bias from both observables and unobservables, the study finds a positive effect of ICT use on TE. On average, the TE score of ICT users is 0.64, whereas ICT non-users have a lower score of 0.57. A quantile regression analysis further reveals a heterogeneous impact of ICT on TE, with the largest effects among less efficient farms. These results suggest that vegetable farmers' performance could be fostered by the widespread use of ICT.There has been a significant policy shift in Germany's energy transition - the Energiewende - resulting from Russia's invasion of Ukraine and the subsequent war. The Easter Package, rolled out in Spring 2022, set a series of ambitious renewable energy targets and laws to enable both climate action and energy security. These are to be implemented in tandem with existing laws such as the Coal Exit Law and the Federal Climate Change Act. Aligning policies and targets to reduce greenhouse gas (GHG) emissions and ensure energy reliability and affordability requires concerted policy coherence, a policy process to pursue multiple goals in a way that maximises synergies and minimises trade-offs. Reducing trade-offs (and their consequences) is especially crucial if the energy transition is to be just for all and become a vehicle towards a broader Just Transition, as well as to achieve the aims of the 2030 Agenda for Sustainable Development (including "leaving no one behind") and the Paris Agreement. This policy brief first examines some of the most important policies - and (in)coherences - pertaining to the Energiewende, with a specific focus on the state of North Rhine-Westphalia (NRW), one of Germany's main coal-mining regions. The brief then goes on to explore the main political drivers - through the lens of ideas, interests and institutions - of policy (in)coherence in two parallel Energiewende policy processes that are particularly relevant to the electricity sector: the coal phase-out and the phase-in of onshore wind. Although solar power and green hydrogen are also key to a successful Energiewende, these are not the subject of this brief. Our insights derive from policy document analysis and 28 semi-structured interviews. To move towards a Just Transition, the following recommendations are made to promote coherence in Germany's Energiewende and inform the ongoing revision of the NRW Sustainability Strategy (last updated in 2020). The recommendations may also be of interest to the newly appointed NRW Advisory Board on Sustainability: Mitigate ideological, institutional and interest-based barriers to ambitious climate action by ensuring a political commitment to policy coherence. In NRW in particular, this means meeting recent promises to deliver a coal phase-out by 2030 and lift the 1, 000 metre (m) "rule" (i.e. 1 kilometre (km) between residential buildings and wind turbines), as well as mitigating arising conflicts between residents' interests, particularly around the sharing of profits. Such commitments should be made explicit in the revised NRW Sustainability Strategy and legislated. Promote greater political equality in all Energiewende policy-making decision processes at all governance levels (i.e. federal, state and municipal) in consultative and participatory mechanisms towards greater energy democracy. Reducing political in-equality is key to increase the public's acceptance of renewable energy projects (e.g. through cooperatives) - one of the aims of the latest NRW Sustainability Strategy. Integrate notions of social and climate justice into Energiewende policy to ensure the German energy transition is a just one for all individuals, and not just for German coal workers. Notions of procedural, distribution and recognition justice are featured here and should be highlighted in the updated NRW Sustainability Strategy.
    Keywords: Energiewende, Germany, North Rhine-Westphalia, Energy transition, Coal phase-out, On-shore wind phase-in, Political inequality, Synergies, Trade-offs, Policy incoherence
    Date: 2023
  4. By: Asongu, Simplice; Odhiambo, Nicholas
    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
    JEL: E23 F21 F30 L96 O55
    Date: 2022–01
  5. By: Noubissi Domguia, Edmond; Asongu, Simplice
    Abstract: This study contributes to the extant literature on the nexus between information and communication technologies (ICTs) and agriculture. Despite increasing attention on the subject, existing studies are sparse on the channels through which ICTs affect the agricultural sector. We use a stochastic impact model extended to the population, affluence and technology regression model to assess both the impact and transmission of ICTs on agriculture in 18 sub-Saharan African countries. The empirical results show that ICT use measured by Internet, mobile and fixed-line telephone penetration boosts the agricultural sector enormously. In addition, the mediation analysis reveals that ICTs not only have a direct positive effect on agriculture but also a positive indirect effect through its impact on financial development and trade openness and a negative indirect effect through energy consumption. However, the total effect is positive and shows that ICTs are supporting the development of the agricultural sector in sub-Saharan Africa. To enhance the positive effects of ICTs on agriculture, governments should design policies to improve access to credit for the private sector, promote liberalization, and provide financial incentives for the development of green and less expensive agricultural technologies.
    Keywords: ICT, agriculture, Sub-Saharan Africa, transmission channels, mediation
    JEL: L96 O55
    Date: 2022–01–03
  6. By: Shobande, Olatunji; Asongu, Simplice A
    Abstract: The struggle to combat climate change remains complex and challenging. Currently, two climate change approaches, namely, mitigation and adaptation, have been widely supported. These are empirical, requiring further explanation of the main drivers of carbon emissions. This research seeks to tackle this problem by providing a strategy to reduce climate change impacts. This study contributes to the existing empirical literature in several ways. It investigates whether education and information and communication technology (ICT) matter in promoting environmental sustainability in the Eastern and Southern Africa. The empirical evidence is based on third-generation panel unit root and cointegration tests that account for the potential issue of structural breaks in the series. We further dissect the long and short run dynamics using the panel Granger causality approach. Our findings show the possibility of using education and clean technology investment in a complementary strategy for mitigating carbon emissions and promoting environmental sustainability in the sampled countries.
    Keywords: Environmental Sustainability; ICT; Education; Eastern Africa; Southern Africa
    JEL: C52 O38 O40 O55 P37
    Date: 2022–01–02

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