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on Information and Communication Technologies |
| By: | Toni Ahnert; Sebastian Doerr; Nicola Pierri; Yannick Timmer |
| Abstract: | We study the importance of information technology (IT) in banking for entrepreneurship. Guided by a parsimonious model, we establish that job creation by young firms is stronger in US counties more exposed to banks with greater IT adoption. We present evidence consistent with banks' IT adoption spurring entrepreneurship through a collateral channel: entrepreneurship increases by more in IT-exposed counties when house prices rise. Further analysis suggests that IT improves banks' ability to determine collateral values, in particular when collateral appraisal is more complex. IT also reduces the time and cost of disbursing collateralized loans. |
| Keywords: | Technology in banking; Entrepreneurship; Information technology; Collateral; Screening |
| JEL: | D82 G21 L26 |
| Date: | 2024–09–24 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfe:2024-83 |
| By: | Draca, Mirko (CEP, London School of Economics ; Warwick University and CAGE Research Centre); Nathan, Max (CEP, London School of Economics ; Warwick University and CAGE Research Centre ; University College London); Nguyen-Tien, Viet (CEP, London School of Economics ; POID, London School of Economics); Oliveira-Cunha, Juliana (CEP, London School of Economics ; IGC, London School of Economics); Rosso, Anna (CEP, London School of Economics ; University of Insubria); Valero, Anna (CEP, London School of Economics ; POID, London School of Economics) |
| Abstract: | Which types of human capital influence the adoption of advanced technologies? We study the skill-biased adoption of information and communication technologies (ICT) across two waves in the UK. Specifically, we compare the new wave of cloud and machine learning / AI technologies during the 2010s - pre-LLM - with the previous wave of personal computer adoption in the 1990s and early 2000s. At the area-level we see the emergence of a distinct STEM-biased adoption effect for the second wave of cloud and machine learning / AI technologies (ML/AI), alongside a general skill-biased effect. A one-standard deviation increase in the baseline share of STEM workers in areas is associated with around 0.3 of a standard deviation higher adoption of cloud and ML/AI. We find similar effects at the firm level where we are able to test for the influence of a wide range of skills. In turn, this STEM-biased adoption pattern has encouraged the concentration of these technologies, leading to more acute differences between high-tech and low-tech areas and firms. In contrast with classical technology diffusion, recent cloud and ML/AI adoption in the UK seems more likely to widen inequalities than reduce them |
| Keywords: | Technology Diffusion ; ICT ; Human Capital ; STEM JEL Codes: D22 ; J24 ; O33 ; R11 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:wrk:warwec:1521 |
| By: | Masaki Mori; Hua Fan; Chen Zheng |
| Abstract: | This paper primarily explores the impact and mechanisms of smart city policies on innovation output in China’s listed enterprises. Using a sample of A-share listed companies in 246 cities from 2004 to 2019, we employ the Staggered Difference-in-Differences (DID) method to analyse the influence of smart city policies on corporate innovation. Simultaneously, we also analyse the impact mechanisms of smart city policies on corporate innovation activities from the perspectives of industry competition, agglomeration of smart city development-related industries, internet development, and enterprise digital transformation.The study reveals that smart city policies effectively promote innovation output in China’s listed companies. From the perspective of industrial development, smart city policies have substantially stimulated cities’ lower competitive enterprises to innovate, and promoted innovations through agglomeration of industries which are closely related to smart city development.From the perspective of technological development, smart city policies enhance the innovation capabilities of enterprises through the application of the Internet and information technology. Through digital transformation, enterprises can optimise department structures, reduce costs, broaden marketing channels, and improve operational efficiency, leading to further innovations.The study also finds that smart city policies significantly promote innovation output in state-owned, large, and mature enterprises. However, the impact on innovation in non-state-owned, small and medium-sized enterprises is not pronounced and may even hinder innovation. Additionally, the influence of smart city policies on corporate innovation exhibits regional imbalances, with innovative effects being significant in economically advanced first-tier cities, as well as third, fourth and fifth-tier cities. The innovation effect in medium-developed second-tier cities is not significant. These findings indicate potential design flaws and implementation constraints in smart city policies, suggesting a failure to adequately consider the actual needs and challenges of small to medium-sized enterprises and medium-developed cities, leading to unequal resource distribution. |
| Keywords: | Chinese corporations; Innovation; Smart City |
| JEL: | R3 |
| Date: | 2024–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:arz:wpaper:eres2024-050 |
| By: | Bernardo Caldarola; Luca Fontanelli |
| Abstract: | Recent empirical evidence finds positive associations between digitalisation and industry concentration. However, ICT may not be all alike. We investigate the effect of the purchase of cloud services on the long run size growth rate of French firms. Our findings suggest that cloud services positively impact firm growth rates, with smaller firms experiencing more significant benefits compared to larger firms. This evidence suggests that the diffusion of cloud technologies may help mitigate concentration in the era of the digital transition by favouring the digitalisation and growth of smaller firms, especially when the cloud services provided are more advanced. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2409.17035 |
| By: | Danhou Li (Department of Economics, National University of Singapore, Singapore); Ce Matthew Shi (Department of Economics, Chinese University of Hong Kong, Hong Kong SAR) |
| Abstract: | This paper examines theoretically and empirically the welfare effects of differential pricing for Internet traffic in a network market. We begin by analyzing a model of differential pricing by a monopolist Internet service provider (ISP), wherein charges are levied on content providers for traffic flow and on consumers for Internet access. Content providers differ in terms of their demand for Internet traffic and their value to consumers (“network effects†). Under linear demands, we show that compared to uniform pricing, differential pricing based solely on network effects is welfare-enhancing, while purely elasticity-based differential pricing reduces content provider surplus and social welfare. The welfare effects become ambiguous when both network effects and demand elasticities differ across content providers. Using a unique dataset on monthly transactions between a large ISP and major content providers in China (where ISPs legally own Internet traffic services in the form of CDN), we estimate the model and quantify the welfare effects using the demand and cost estimates. Our counterfactual analysis shows that consumer surplus and content provider surplus increase under differential pricing; however, a disproportionate share of the welfare gain is captured by several big content providers, while smaller content providers tend to become worse off. |
| Keywords: | differential pricing; Internet traffic; network industry; welfare |
| JEL: | L12 L86 L96 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:net:wpaper:2409 |