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Internet Penetration and Productivity: A Panel Study

Year 2017, Volume: 17 Issue: 1, 59 - 66, 15.03.2017
https://doi.org/10.18037/ausbd.415638

Abstract



 Since the early 1990s, penetration of internet has accelerated significantly in the world. The impact of internet and ICT on labor productivity at firm and industry level has been studied by many authors. The purpose of this study is to look at the macro-level effects of the internet on various indicators of productivity. A dataset consisting of a panel of annual observations for 162 countries is used in the study. Another important point that distinguishes our paper form other contributions on ICT and productivity is that we employed the most comprehensive set of productivity indicators (13 productivity indicators) instead of using only one indicator. We identified a positive correlation between internet penetration and productivity. This finding is statistically significant and valid for thirteen different productivity indicators. Our results suggest that internet penetration increases productivity controlling for other factors that may contribute to productivity. 

References

  • Autor, D., Levy, F., Murnane, R. (2003). The Skill Content of Recent Technological Change: An Empirical Exploration. Quarterly Journal of Economics, 118 (4), 1279–333.
  • Atzeni, G.E., Carboni, O.A. (2006). ICT Productivity and Firm Propensity to Innovative Investment: Evidence From Italian Microdata. Information Economics and Policy, 18, 139-156.
  • Bertschek, I., Cerquera, D., Klein, G. J. (2013). More Bits-More Bucks? Measuring the Impact of Broadband Internet on Firm Performance. Information Economics and Policy, 25, 190-203.
  • Belorgey, N., Lecat, R., Maury, T. (2006). Determinants of Productivity per Employee: An Empirical Estimation Using Panel Data. Economics Letters, 91(2), 153-157.
  • Bianchi, C., Mathews, S. (2016). Internet Marketing and Export Market Growth in Chile. Journal of Business Research, 69 (2), 426-434.
  • Bloom, N., Kretschmer, T., Van Reenen, J. (2011). Are Family-Friendly Workplace Practices a Valuable Firm Resource? Strategic Management Journal, 32(4), 343–67.
  • Brynjolfsson, E., Hitt, L. M. (2003). Computing Productivity: Firm-level Evidence. Review of Economics and Statistics, 85(4), 793–808.
  • Choi, C. (2003). Does the Internet Stimulate Inward Foreign Direct Investment. Journal of Policy Modeling, 25, 319-326.
  • Czernich, N., Falck, O. Kretschmer, T., Woessmann, L. (2011). Broadband Infrastructure and Economic
  • Growth. The Economic Journal, May, 505-532 Daveri,F. (2002). The New Economy in Europe, 1992-2001. Oxford Review of Economic Policy, 18(3), 345–362.
  • Djankov, S., Murrell, P. (2002). Enterprise Restructuring in Transition: A Quantitative Survey. Journal of Economic Literature, 15(3): 739–792.
  • Estrin, S., Hanousek, J., Kogenda, E., Svejnar, J. (2009). The Effects of Privatization and Ownership in Transition Countries. Journal of Economic Literature, 47(3), 699-728.
  • Fabiani,S., Schivardi, F., Trento, S. (2005). ICT Adoption in Italian Manufacturing: Firm-level Evidence. Industrial and Corporate Change, 14(2), 225–249.
  • Grimes, A., Ren, C., Stevens, P. (2012). The Need for Speed: Impacts of Internet Connectivity on Firm Productivity. Journal of Productivity Analysis, 37 (2), 187-201.
  • Hu Q., Quan, J. (2005). Evaluating the Impact of IT Investments on Productivity: A Causal Analysis at Industry Level. International Journal of Information Management, 25, 39–53.
  • Jalava,J., Pohjola, M. (2008).The Roles of Electricity and ICT in Economic Growth: Case Finland. Explorations in Economic History, 45(3), 270–287.
  • Jorgenson, D., Motohashi, K. (2005). Information Technology and the Japanese Economy. Journal of the Japanese and International Economies, 19(4), 460–481.
  • Jung, H., Na, K., Yoon, C. (2013). The Role of ICT in Korea’s Economic Growth: Productivity Changes Across Industries Since the 1990s. Telecommunications Policy, 37, 292-310.
  • Lehr, B., Lichtenberg, F. (1999). Information Technology and Its Impact on Firm-Level Productivity: Evidence From Government and Private Data Sources, 1977–1993. The Canadian Journal of Economics, 32(2), 335–362.
  • Maciulyte-Sniukiene, A., Gaile-Sarkane, E. (2014). Impact of Information and Telecommunication Technologies Development on Labor Productivity. Procedia-Social and Behavioral Sciences, 110, 1271-1282.
  • Meijers, H. (2014). Does the Internet Generate Economic Growth, International Trade, or Both. International Economics Economic Policy, 11(1), 137-163.
  • Oliner, S., Sichel, D. (2000). The Resurgence of Growth in the Late 1990s: Is Information Technology the Story? Journal of Economic Perspectives, 14(4), 3–22.
  • O’Mahony, M., Vecchi, M. (2005). Quantifying the Impact of ICT Capital on Output Growth: A Heterogeneous Dynamic Panel Approach. Economica, 72(288), 615–633.
  • Oulton, N. (2002). ICT and Productivity Growth in the UK. Oxford Review of Economic Policy, 18(3), 363–379.
  • Pradhan, R. P., Arvin, M. B., Norman, N. R., Bele, S. K. (2014). Economic Growth and the Development of Telecommunications Infrastructure in the G-20 Countries: A Panel-VAR Approach. Telecommunications Policy, 38, 634-649.
  • Salahuddin, M., Gow, J. (2016). The Effects of Internet Usage, Financial Development and Trade Openness on Economic Growth in South Africa: A Time Series Analysis. Telematics and Informatics, 33(4), 1141-1154.
  • Sanchez, J. I. L., Rata, B. M., Duarte, A. R., Sandulli, F. D. (2006). Is the Internet Productive? A Firm Level Anlaysis. Technovation, 26, 821-826.
  • Stiroh, K. J. (2002). Information Technology and The U.S. Productivity Revival: What Do the Industry Data Say? American Economic Review, 92(5), 1559–76.
  • Vu, K. M. (2011). ICT as a Source of Economic Growth in the Information Age: Empirical Evidence from the 1996-2005 Period. Telecommunications Policy, 35, 357-372.
  • Vu, K. M. (2013). Information and Communication Technology (ICT) and Singapore’s Economic Growth. Information Economics and Policy, 25, 284–300.
Year 2017, Volume: 17 Issue: 1, 59 - 66, 15.03.2017
https://doi.org/10.18037/ausbd.415638

Abstract

References

  • Autor, D., Levy, F., Murnane, R. (2003). The Skill Content of Recent Technological Change: An Empirical Exploration. Quarterly Journal of Economics, 118 (4), 1279–333.
  • Atzeni, G.E., Carboni, O.A. (2006). ICT Productivity and Firm Propensity to Innovative Investment: Evidence From Italian Microdata. Information Economics and Policy, 18, 139-156.
  • Bertschek, I., Cerquera, D., Klein, G. J. (2013). More Bits-More Bucks? Measuring the Impact of Broadband Internet on Firm Performance. Information Economics and Policy, 25, 190-203.
  • Belorgey, N., Lecat, R., Maury, T. (2006). Determinants of Productivity per Employee: An Empirical Estimation Using Panel Data. Economics Letters, 91(2), 153-157.
  • Bianchi, C., Mathews, S. (2016). Internet Marketing and Export Market Growth in Chile. Journal of Business Research, 69 (2), 426-434.
  • Bloom, N., Kretschmer, T., Van Reenen, J. (2011). Are Family-Friendly Workplace Practices a Valuable Firm Resource? Strategic Management Journal, 32(4), 343–67.
  • Brynjolfsson, E., Hitt, L. M. (2003). Computing Productivity: Firm-level Evidence. Review of Economics and Statistics, 85(4), 793–808.
  • Choi, C. (2003). Does the Internet Stimulate Inward Foreign Direct Investment. Journal of Policy Modeling, 25, 319-326.
  • Czernich, N., Falck, O. Kretschmer, T., Woessmann, L. (2011). Broadband Infrastructure and Economic
  • Growth. The Economic Journal, May, 505-532 Daveri,F. (2002). The New Economy in Europe, 1992-2001. Oxford Review of Economic Policy, 18(3), 345–362.
  • Djankov, S., Murrell, P. (2002). Enterprise Restructuring in Transition: A Quantitative Survey. Journal of Economic Literature, 15(3): 739–792.
  • Estrin, S., Hanousek, J., Kogenda, E., Svejnar, J. (2009). The Effects of Privatization and Ownership in Transition Countries. Journal of Economic Literature, 47(3), 699-728.
  • Fabiani,S., Schivardi, F., Trento, S. (2005). ICT Adoption in Italian Manufacturing: Firm-level Evidence. Industrial and Corporate Change, 14(2), 225–249.
  • Grimes, A., Ren, C., Stevens, P. (2012). The Need for Speed: Impacts of Internet Connectivity on Firm Productivity. Journal of Productivity Analysis, 37 (2), 187-201.
  • Hu Q., Quan, J. (2005). Evaluating the Impact of IT Investments on Productivity: A Causal Analysis at Industry Level. International Journal of Information Management, 25, 39–53.
  • Jalava,J., Pohjola, M. (2008).The Roles of Electricity and ICT in Economic Growth: Case Finland. Explorations in Economic History, 45(3), 270–287.
  • Jorgenson, D., Motohashi, K. (2005). Information Technology and the Japanese Economy. Journal of the Japanese and International Economies, 19(4), 460–481.
  • Jung, H., Na, K., Yoon, C. (2013). The Role of ICT in Korea’s Economic Growth: Productivity Changes Across Industries Since the 1990s. Telecommunications Policy, 37, 292-310.
  • Lehr, B., Lichtenberg, F. (1999). Information Technology and Its Impact on Firm-Level Productivity: Evidence From Government and Private Data Sources, 1977–1993. The Canadian Journal of Economics, 32(2), 335–362.
  • Maciulyte-Sniukiene, A., Gaile-Sarkane, E. (2014). Impact of Information and Telecommunication Technologies Development on Labor Productivity. Procedia-Social and Behavioral Sciences, 110, 1271-1282.
  • Meijers, H. (2014). Does the Internet Generate Economic Growth, International Trade, or Both. International Economics Economic Policy, 11(1), 137-163.
  • Oliner, S., Sichel, D. (2000). The Resurgence of Growth in the Late 1990s: Is Information Technology the Story? Journal of Economic Perspectives, 14(4), 3–22.
  • O’Mahony, M., Vecchi, M. (2005). Quantifying the Impact of ICT Capital on Output Growth: A Heterogeneous Dynamic Panel Approach. Economica, 72(288), 615–633.
  • Oulton, N. (2002). ICT and Productivity Growth in the UK. Oxford Review of Economic Policy, 18(3), 363–379.
  • Pradhan, R. P., Arvin, M. B., Norman, N. R., Bele, S. K. (2014). Economic Growth and the Development of Telecommunications Infrastructure in the G-20 Countries: A Panel-VAR Approach. Telecommunications Policy, 38, 634-649.
  • Salahuddin, M., Gow, J. (2016). The Effects of Internet Usage, Financial Development and Trade Openness on Economic Growth in South Africa: A Time Series Analysis. Telematics and Informatics, 33(4), 1141-1154.
  • Sanchez, J. I. L., Rata, B. M., Duarte, A. R., Sandulli, F. D. (2006). Is the Internet Productive? A Firm Level Anlaysis. Technovation, 26, 821-826.
  • Stiroh, K. J. (2002). Information Technology and The U.S. Productivity Revival: What Do the Industry Data Say? American Economic Review, 92(5), 1559–76.
  • Vu, K. M. (2011). ICT as a Source of Economic Growth in the Information Age: Empirical Evidence from the 1996-2005 Period. Telecommunications Policy, 35, 357-372.
  • Vu, K. M. (2013). Information and Communication Technology (ICT) and Singapore’s Economic Growth. Information Economics and Policy, 25, 284–300.
There are 30 citations in total.

Details

Primary Language English
Journal Section Articles
Authors

Assoc. Prof. Dr. Jülide Yalçınkaya Koyuncu

Prof. Dr. Rasim Yılmaz

Assoc. Prof. Dr. Selim Yıldırım

Publication Date March 15, 2017
Submission Date December 23, 2016
Published in Issue Year 2017 Volume: 17 Issue: 1

Cite

APA Yalçınkaya Koyuncu, A. P. D. J., Yılmaz, P. D. R., & Yıldırım, A. P. D. S. (2017). Internet Penetration and Productivity: A Panel Study. Anadolu Üniversitesi Sosyal Bilimler Dergisi, 17(1), 59-66. https://doi.org/10.18037/ausbd.415638

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