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Does upstream regulation matter when measuring the efficiency impact of information technology? Evidence across EU and US industries

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  • Papaioannou, Sotiris K.
  • Dimelis, Sophia P.

Abstract

We examine the role of ICT in reducing industry level technical inefficiency, controlling for the impact of upstream regulations. We conduct industry level stochastic frontier analysis and estimate a technical inefficiency model which allows for an interaction between ICT and upstream regulation. A panel dataset from EU and US industries is used for the period 1995–2007. We find that ICT contributes significantly in reducing technical inefficiency in low technology manufacturing. In service industries this influence is strong only at low levels of regulation. Likewise, in the same sectors, anticompetitive regulation exerts an increasing effect on inefficiency. We fail to establish any significant influence of ICT on the efficiency of high technology industries. When considering alternative dimensions of regulation, most regression estimates confirm baseline results as regards the inefficiency influence of either ICT or regulation. However, the conditional impact of ICT differentiates and depends on the type of regulation examined.

Suggested Citation

  • Papaioannou, Sotiris K. & Dimelis, Sophia P., 2017. "Does upstream regulation matter when measuring the efficiency impact of information technology? Evidence across EU and US industries," Information Economics and Policy, Elsevier, vol. 41(C), pages 67-80.
    • Handle: RePEc:eee:iepoli:v:41:y:2017:i:c:p:67-80
    DOI: 10.1016/j.infoecopol.2017.05.001
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    Citations

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    Cited by:

    1. Jeffrey Kouton & Rafiou R. Bétila & Moïse Lawin, 2021. "The Impact of ICT Development on Health Outcomes in Africa: Does Economic Freedom Matter?," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 12(4), pages 1830-1869, December.
    2. Cuiping Yu & Decai Tang & Acheampong Paul Tenkorang & Brandon J. Bethel, 2021. "The Impact of the Opening of Producer Services on the International Competitiveness of Manufacturing Industry," Sustainability, MDPI, vol. 13(20), pages 1-17, October.
    3. Igna, Ioana A. & Rincon-Aznar, Ana & Venturini, Francesco, 2019. "Upstream regulation, factor demand and productivity: Cross-industry differences in OECD countries, 1975–2007," Information Economics and Policy, Elsevier, vol. 49(C).
    4. Ke-Liang Wang & Ting-Ting Sun & Ru-Yu Xu, 2023. "The impact of artificial intelligence on total factor productivity: empirical evidence from China’s manufacturing enterprises," Economic Change and Restructuring, Springer, vol. 56(2), pages 1113-1146, April.
    5. Pieri, Fabio & Vecchi, Michela & Venturini, Francesco, 2018. "Modelling the joint impact of R&D and ICT on productivity: A frontier analysis approach," Research Policy, Elsevier, vol. 47(9), pages 1842-1852.
    6. Fabio Pieri & Michela Vecchi & Francesco Venturini, 2017. "Modelling the joint impact of R and D and ICT on productivity: A frontier analysis approach," DEM Working Papers 2017/13, Department of Economics and Management.

    More about this item

    Keywords

    ICT; Upstream regulations; Technical efficiency; Stochastic frontier analysis;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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