Endogenous Firm Heterogeneity, ICT and R&D Incentives
Firm heterogeneity explains the productivity driven selection mechanism that determines aggregate productivity growth within industries. This paper empirically demonstrates that ICT has a robust impact on firm heterogeneity only when ICT is used intensively and jointly with specific ICT applications. ICT induced heterogeneity is shown to have a positive impact on the decision to invest in R&D personnel.
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