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A statistical analysis of industrial penetration and internet intensity in Taiwan

Author

Listed:
  • Chia-Lin Chang

    (Department of Applied economics, Department of Finance National Chung Hsing University, Taiwan.)

  • Yu-Chieh Wu

    ( Department of Applied Economics National Chung Hsing University Taichung, Taiwan.)

  • Michael McAleer

    ( Department of Quantitative Finance National Tsing Hua University, Taiwan and Econometric Institute Erasmus School of Economics Erasmus University Rotterdam, The Netherlands and Department of Quantitative Economics Complutense University of Madrid, Spain And Institute of Advanced Sciences Yokohama National University, Japan.)

Abstract

This paper investigates the effect of industrial penetration (geographic concentration of industries) and internet intensity (the proportion of enterprises that use the internet) for Taiwan manufacturing firms, and analyses whether the relationships are substitutes or complements. The sample observations are based on 153,081 manufacturing plants, and covers 26 two-digit industry categories and 358 geographical townships in Taiwan. The Heckman selection model is used to accommodate sample selectivity for unobservable data for firms that use the internet. The empirical results from two-stage estimation show that: (1) a higher degree of industrial penetration will not affect the probability that firms will use the internet, but will affect the total expenditure on internet intensity; (2) for two-digit SIC industries, industrial penetration generally decreases the total expenditure on internet intensity; and (3) industrial penetration and internet intensity are substitutes.

Suggested Citation

  • Chia-Lin Chang & Yu-Chieh Wu & Michael McAleer, 2018. "A statistical analysis of industrial penetration and internet intensity in Taiwan," Documentos de Trabajo del ICAE 2018-02, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico.
  • Handle: RePEc:ucm:doicae:1802
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    More about this item

    Keywords

    Industrial penetration; Internet intensity; Sample selection; Incidental truncation.;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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