Barriers to investment in ICT

Bugamelli, Matteo; Pagano, Patrizio

doi:10.1080/0003684042000270031

Cited by 151 publications

(41 citation statements)

References 22 publications

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“…These results are similar to other related papers. Bugamelli and Pagano (2004) found an elasticity of ICT capital equal to 0.04 and of other capital equal to 0.24. Shao and Lin (2001) found an elasticity of ICT investment equal to 0.05 and an elasticity 7 The results for each parameter are available upon request.…”

Section: Resultsmentioning

confidence: 99%

“…Addressing the analysis to territorial disparities, the authors find that the impact of ICT on productivity is significant and helps to explain the difference in firm performance between the North and South of Italy. Bugamelli and Pagano (2004) find strong evidence in favour of complementarity between ICT, human capital and reorganisation of production. Hall et al (2013) in a recent work analyse the role of ICT and R&D investments on both innovation and productivity performance in an unbalanced panel of Italian manufacturing firms.…”

Section: Literature Reviewmentioning

confidence: 89%

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ICTs and time-span in technical efficiency gains. A stochastic frontier approach over a panel of Italian manufacturing firms

Castiglione

Infante

2014

Economic Modelling

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This paper, in contrast to much of the existing literature, which focuses on the impact of Information and Communication Technologies (ICT) on labour productivity, assesses the relationship between ICTs investments and Technical Efficiency (TE) using a stochastic frontier approach. We use a large panel dataset of Italian manufacturing firms over the period [1995][1996][1997][1998][1999][2000][2001][2002][2003][2004][2005][2006] and confirm prior findings of the existing literature on ICT and productivity. In addition, we test on which extend the ICT investments influence the distance of the firm from the production frontier; that is, how ICT's adoption influences the closing of the firm efficiency gap. We also test how long the effects of ICT investments on technical efficiency last. We find that ICT returns on TE are influenced by some firm's characteristics, most of them idiosyncratic, such as management practices, labour organization, research and development.Keywords: ICT; stochastic frontier; technical efficiency; manufacturing firms JEL: D24, L25, L63, O33 1 IntroductionAfter a long debate on the returns of investment in information and communication technology (ICT) there is now general agreement that ICT positively contributes to economic growth both at micro and macroeconomic levels. This debate has been largely based on the productivity paradox, which started soon after Robert Solow's (1987) statement: "You can see the computer age everywhere but in the productivity statistics".The related empirical literature studies both the relationship between ICT investments and labour productivity and ICT investments and total factor productivity (TFP). Few attempts have been made to also study the relationship between ICT investments and technical efficiency (TE) at firm level. The importance of this relationship arises from the fact that the productivity growth is mainly the result of technical and efficiency changes. Hence, it is important to verify the effect that ICTs have both on productivity and TE.In this paper the Cobb-Douglas and Translog production functions are used to explore ICT investments impact on firm distance from the 'best practice technique'. We utilize the stochastic frontier model introduced by Battese and Coelli (1995). This methodology has the benefit that it uses a one-stage procedure to estimates both productivity and (in)efficiency. The paper adds to the existing literature in four ways. Firstly, ICT capital and high-skilled workers are considered as inputs in the firm's production function. Secondly, ICT investments are considered as a factor able to directly influence TE. Thirdly, we investigate the length of the positive impact of ICT on firm efficiency. Finally, we postulate that ICT effects on firm efficiency depend on some complementary idiosyncratic factors (such as management practices, research and development investments and other firm' characteristics) that are able to boost ICT returns.The analysis is conducted using a balanced and an unbalanced panel data of Itali...

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Section: Resultsmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 89%

ICTs and time-span in technical efficiency gains. A stochastic frontier approach over a panel of Italian manufacturing firms

Castiglione

Infante

2014

Economic Modelling

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“…On the geography of Italian industrial districts, see SFORZI, 2002. 8 Several authors argue that the gains in productivity associated with ICT investment are conditional on microcomplementarities among ICT adoption, internal reorganization processes and high levels of human capital (see BRYNJOLFSSON and HITT, 2000;BRESNAHAN et al, 2002;FALK, 2002;HUR et al, 2005 and, with specific reference to Italy, TRENTO and WARGLIEN, 2003, BUGAMELLI and PAGANO, 2004, LUCCHETTI and STERLACCHINI, 2004. 9 Mezzogiorno is used to describe the South of the country; in the literature it refers to the mainland regions of Abruzzo, 10 Other possible effects of outsourcing have been investigated as well.…”

Section: Discussionmentioning

confidence: 99%

Subcontracting in the Italian Industry: Labour Division, Firm Growth and the North-South Divide

Giunta¹,

Nifo

Scalera

2010

SSRN Journal

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“…Arvanitis (2005) finds for Swiss firms, mainly SMEs, no evidence for complementarity between IT and decentralized workplace practices and that the productivity contribution of flexible and decentralized workplace practices is lower than the contribution of ICT or human capital. Bugamelli and Pagano (2004) erations. In particular, these systems have increased the speed of information gathering and availability and they feature an integrated database.…”

Section: Literature and Background Discussionmentioning

confidence: 99%

Combining Technology and Work Organization: An Analysis of Complementarity between IT and Decentralization across Firms of Different Size

Rasel

2014

SSRN Journal

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. Combining Technology and Work Organization: An Analysis of Complementarity between IT and Decentralization across Firms of Different SizeFabienne Rasel * September 2014Abstract This paper examines whether information technology (IT) and decentralized work organization are complementary only for large firms or also for smaller firms.Empirical evidence, which suggests complementarity between IT and decentralization, is mainly based on large firms. Using data from a sample of 3292 SMEs and of 598 larger firms from the manufacturing and service sector in Germany, I can observe firms' IT intensity in terms of enterprise software and computer use and whether firms have a decentralized work organization. I find that SMEs with decentralized work practices tend to use IT more intensively. Moreover, for the sample of SMEs, IT and decentralized work organization are individually associated with higher productivity but the combination of IT and decentralization does not yield a productivity premium. Contrarily, for the sample of larger firms, the results show that the productivity of IT depends positively on decentralization. The findings suggest that combining IT and decentralized work organization seems to be a successful strategy only for larger firms.

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Barriers to investment in ICT

Cited by 151 publications

References 22 publications

ICTs and time-span in technical efficiency gains. A stochastic frontier approach over a panel of Italian manufacturing firms

ICTs and time-span in technical efficiency gains. A stochastic frontier approach over a panel of Italian manufacturing firms

Subcontracting in the Italian Industry: Labour Division, Firm Growth and the North-South Divide

Combining Technology and Work Organization: An Analysis of Complementarity between IT and Decentralization across Firms of Different Size

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