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ICT as an Enabler of Innovation. Evidence from German Microdata

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  • Nadine Fabritz

Abstract

Using data from a survey of German manufacturing firms, this paper empirically tests the hypothesis that investment in ICT enables product innovation at the firm level. The empirical approach employs a value-added model, which controls for time-invariant firm characteristics. We instrument with exogenous impulses that affect firms’ decision to invest in ICT to account for remaining endogeneity that arises due to the fact that firms may decide to innovate and invest in ICT simultaneously. In addition, we employ matching methods to corroborate the results. We find consistent evidence that ICT investment increases firms’ product innovations.

Suggested Citation

  • Nadine Fabritz, 2015. "ICT as an Enabler of Innovation. Evidence from German Microdata," ifo Working Paper Series 195, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    • Handle: RePEc:ces:ifowps:_195
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    Cited by:

    1. Inha Oh & Dongnyok Shim, 2020. "IT Adoption and Sustainable Growth of Firms in Different Industries—Are the Benefits Still Expected?," Sustainability, MDPI, vol. 12(22), pages 1-29, November.

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    More about this item

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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