IDEAS home Printed from https://ideas.repec.org/p/ira/wpaper/201709.html
   My bibliography  Save this paper

Internet and enterprise productivity: evidence from Latin America

Author

Listed:
  • Juan Jung

    () (AQR-IREA, Universitat de Barcelona, Av. Diagonal 690, 08034 Barcelona, Spain.)

  • Enrique López-Bazo

    () (AQR-IREA, Universitat de Barcelona, Av. Diagonal 690, 08034 Barcelona, Spain.)

  • Matteo Grazzi

    () (Competitiveness, technology and innovation division - Inter-American Development Bank, 1300 New York Avenue, NW 20577 Washington DC, USA.)

Abstract

This paper tests three hypotheses regarding the link between internet and firm productivity: i) internet adoption and use constitute a source of productivity growth for firms in Latin America, ii) the intensity of its use also matters, and iii) the link between the new technologies and productivity levels is not uniform over the whole productivity distribution. The evidence in this paper fills the gap of scarce and fragmented literature focused on Latin America, and is aligned with previous research for more developed regions which has generally recognized that Information and Communication Technologies (ICTs) have radically changed how modern business are conducted, benefitting firm performances through several channels, such as increasing the efficiency of internal processes, expanding market reach or increasing innovation. Our findings suggest that low-medium productive firms benefit more from an expansion in internet adoption and use, in comparison with the most productive ones. If this evidence is supposed to reflect long-term effects, then public policies oriented to massify internet adoption and promote internet use intensively will surely contribute to reduce inequalities of enterprise’s productivity levels, promoting a level playing field among Latin American firms, something especially relevant for the most unequal region of the world.

Suggested Citation

  • Juan Jung & Enrique López-Bazo & Matteo Grazzi, 2017. "Internet and enterprise productivity: evidence from Latin America," IREA Working Papers 201709, University of Barcelona, Research Institute of Applied Economics, revised May 2017.
  • Handle: RePEc:ira:wpaper:201709
    as

    Download full text from publisher

    File URL: http://www.ub.edu/irea/working_papers/2017/201709.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Sergio Firpo, 2007. "Efficient Semiparametric Estimation of Quantile Treatment Effects," Econometrica, Econometric Society, vol. 75(1), pages 259-276, January.
    2. Diego Aboal & Ezequiel Tacsir, 2015. "Innovation and Productivity in Services and Manufacturing: The Role of ICT Investment," IDB Publications (Working Papers) 7381, Inter-American Development Bank.
    3. Ilke Van Beveren, 2012. "Total Factor Productivity Estimation: A Practical Review," Journal of Economic Surveys, Wiley Blackwell, vol. 26(1), pages 98-128, February.
    4. Acs, Zoltan J & Audretsch, David B, 1988. "Innovation in Large and Small Firms: An Empirical Analysis," American Economic Review, American Economic Association, vol. 78(4), pages 678-690, September.
    5. Sofronis K. Clerides & Saul Lach & James R. Tybout, 1998. "Is Learning by Exporting Important? Micro-Dynamic Evidence from Colombia, Mexico, and Morocco," The Quarterly Journal of Economics, Oxford University Press, vol. 113(3), pages 903-947.
    6. Markus Frölich & Blaise Melly, 2013. "Unconditional Quantile Treatment Effects Under Endogeneity," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 31(3), pages 346-357, July.
    7. Paunov, Caroline & Rollo, Valentina, 2016. "Has the Internet Fostered Inclusive Innovation in the Developing World?," World Development, Elsevier, vol. 78(C), pages 587-609.
    8. Coe, David T. & Helpman, Elhanan, 1995. "International R&D spillovers," European Economic Review, Elsevier, vol. 39(5), pages 859-887, May.
    9. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 2002. "Information Technology, Workplace Organization, and the Demand for Skilled Labor: Firm-Level Evidence," The Quarterly Journal of Economics, Oxford University Press, vol. 117(1), pages 339-376.
    10. Danielle Galliano & Pascale Roux, 2008. "Organisational motives and spatial effects in Internet adoption and intensity of use: evidence from French industrial firms," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 42(2), pages 425-448, June.
    11. Thomas Hempell, 2005. "Does experience matter? innovations and the productivity of information and communication technologies in German services," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 14(4), pages 277-303.
    12. Ornaghi, Carmine, 2006. "Spillovers in product and process innovation: Evidence from manufacturing firms," International Journal of Industrial Organization, Elsevier, vol. 24(2), pages 349-380, March.
    13. Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 143-173, October.
    14. Bertschek, Irene & Cerquera, Daniel & Klein, Gordon J., 2011. "More bits - more bucks? Measuring the impact of broadband internet on firm performance," ZEW Discussion Papers 11-032, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    15. Irene Bertschek & Ulrich Kaiser, 2004. "Productivity Effects of Organizational Change: Microeconometric Evidence," Management Science, INFORMS, vol. 50(3), pages 394-404, March.
    16. Erik Brynjolfsson & Lorin M. Hitt, 2003. "Computing Productivity: Firm-Level Evidence," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 793-808, November.
    17. Sergio Firpo & Nicole M. Fortin & Thomas Lemieux, 2009. "Unconditional Quantile Regressions," Econometrica, Econometric Society, vol. 77(3), pages 953-973, May.
    18. Murat Şeker, 2012. "Importing, Exporting, and Innovation in Developing Countries," Review of International Economics, Wiley Blackwell, vol. 20(2), pages 299-314, May.
    19. Cohen, Wesley M & Klepper, Steven, 1996. "Firm Size and the Nature of Innovation within Industries: The Case of Process and Product R&D," The Review of Economics and Statistics, MIT Press, vol. 78(2), pages 232-243, May.
    20. Nina Czernich & Oliver Falck & Tobias Kretschmer & Ludger Woessmann, 2011. "Broadband Infrastructure and Economic Growth," Economic Journal, Royal Economic Society, vol. 121(552), pages 505-532, May.
    21. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
    22. Glass, Amy Jocelyn & Saggi, Kamal, 1998. "International technology transfer and the technology gap," Journal of Development Economics, Elsevier, vol. 55(2), pages 369-398, April.
    23. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
    24. Marc Schiffbauer & Sandra Ospina, 2010. "Competition and Firm Productivity; Evidence from Firm-Level Data," IMF Working Papers 10/67, International Monetary Fund.
    25. Erik Brynjolfsson & Lorin M. Hitt, 2000. "Beyond Computation: Information Technology, Organizational Transformation and Business Performance," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 23-48, Fall.
    26. Anon Higon, Dolores, 2007. "The impact of R&D spillovers on UK manufacturing TFP: A dynamic panel approach," Research Policy, Elsevier, vol. 36(7), pages 964-979, September.
    27. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 317-341.
    28. Arvanitis, Spyros & Loukis, Euripidis N., 2009. "Information and communication technologies, human capital, workplace organization and labour productivity: A comparative study based on firm-level data for Greece and Switzerland," Information Economics and Policy, Elsevier, vol. 21(1), pages 43-61, February.
    29. Rothe, Christoph, 2010. "Nonparametric estimation of distributional policy effects," Journal of Econometrics, Elsevier, vol. 155(1), pages 56-70, March.
    30. Alessandra Colecchia & Paul Schreyer, 2002. "ICT Investment and Economic Growth in the 1990s: Is the United States a Unique Case? A Comparative Study of Nine OECD Countries," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(2), pages 408-442, April.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    ICT; Internet; Productivity; firms; Latin America JEL classification:D22; O31; O33; O54.;

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • O - Economic Development, Innovation, Technological Change, and Growth

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ira:wpaper:201709. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alicia García). General contact details of provider: http://edirc.repec.org/data/feubaes.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.