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ICT, Consulting and Innovative Capabilities

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  • Cerquera Dussán, Daniel

Abstract

This paper analyzes the impact of the decision to contract ICT consulting on firms' innovative incentives. The paper develops a theoretical model and estimates some of its implications for a sample of German firms. In particular, the paper estimates the average treatment effect of the decision to contract ICT consulting on firms' innovative incentives, considering the role of endogeneity and unobserved heterogeneity in the correlated random coefficient model. The paper shows three main results. First, the theoretical model shows that ICT consulting increases aggregate incentives to innovate. This result is not corroborated by the empirical application. ICT consulting does not affect neither the probability of introducing product or process innovations nor the number of such innovations. The empirical results show that ICT consulting affects negatively the value of the introduced product and processes innovation. Second, the theoretical model suggests that low productivity firms might evidence either lower, unaffected or higher incentives to innovate. The empirical application shows that low productivity firms exhibit higher incentives to innovate. Third, although the theoretical analysis shows that the lower the productivity level the more the incentives to contract ICT consulting, the empirical evidence is inconclusive on this matter. These results suggest that firms optimize their innovations portfolio through ICT consulting.

Suggested Citation

  • Cerquera Dussán, Daniel, 2008. "ICT, Consulting and Innovative Capabilities," ZEW Discussion Papers 08-127, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  • Handle: RePEc:zbw:zewdip:7517
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    File URL: https://www.econstor.eu/bitstream/10419/27610/1/dp08127.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    ICT Consulting; Competition and Innovation;

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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