The impact of ICT patents on economic growth: An international evidence

This study aims to examine the impact of inventions, measured by the number of new patents, on economic growth. Specifically, we focus on patents in the ICT sector for a global sample of 43 economies, comprising 26 advanced and 17 emerging market economies in the period 1998 to 2016. We use a two-step system GMM to control for potential endogeneity in the data. Our results are threefold. First, total patents have mutually causal effects with economic growth, but there is no evidence of an impact of total patents on manufacturing sector growth. At the same time, ICT patents have a unidirectional causal impact on both, overall economic growth, and the growth of services and manufacturing. Second, the impact of total patents on economic growth is stronger in advanced economies. At the same time, ICT patents have a positive significant impact on the growth of advanced economies and a negative significant effect on the growth of emerging economies. Third, in the long-run, ICT patents have a positive significant impact on economic growth, while total patents do not.     

Total factor productivity enablers in the ICT industry: A cross-country firm-level analysis

Advancements in productivity in the digital economy constitute an important engine for economic growth. What drives productivity dynamics in the information and communication technology (ICT) sector? This study examines the productivity dynamics of ICT firms across countries from the perspective of corporate balance sheets. We study the effects of intangible assets and leverage on productivity growth using firm-level panel data from five industrialized countries. We find that intangible assets positively affect the total factor productivity in the ICT sector. The positive effect of intangible assets on total factor productivity growth is larger for ICT manufacturing firms than for ICT service firms. We also find that leverage has a positive relationship with total factor productivity development in the ICT sector. In addition, our empirical results substantiated that productivity is catching up to the technological frontier. Furthermore, larger firms and/or younger firms generally show higher total factor productivity growth than their peers. Economies of scale are more prominent in the ICT service sector than in the ICT manufacturing sector. Our findings contribute to the understanding of cross-country productivity dynamics in the ICT sector at the firm level in the digital economy.     

Financial development,ICT diffusion and economic growth: Lessons from MENA region

This paper aims to test jointly two economic puzzles: the effect of financial development and Information and Communication Technology (ICT) on economic growth. Theories predict a positive effect of financial development and ICT on growth but empirical studies on these relationships produced mixed results. Further, we investigate the interaction between financial development and ICT Diffusion to test whether the impact of financial development on growth is strengthened by better ICT infrastructure. In this paper we assess empirically these relationships in some MENA countries. The empirical study is based on estimation of a dynamic panel model with system GMM estimators. There are three main findings. First, our empirical results join empirical literature that find a negative direct effect of financial development on economic growth. This ambiguous relationship may be linked to many phenomenons but there are not yet clear explanations of this puzzle. Second, the estimates reveal a positive and significant direct effect of ICT proxies on economic growth. This implies that MENA countries need to reinforce their ICT policies and improve using of new Information and Communication Technology. Finally, the interaction between ICT penetration and financial development is found positive and significant in the growth regression. This implies that economies in Mena region can benefit from financial development only once a threshold of ICT development is reached.     

The non-linear relationship between ICT diffusion and financial development

This research investigates the linear and non-linear effects of information and communication technology (ICT) diffusion on financial development for 81 countries over the period 1990–2015 by employing the generalized-momentum method (GMM) and panel smooth transition regression (PSTR). Some main conclusions are presented as follows. First, comparing the different effects of ICT on financial development between the high-income group and the middle- & low-income group, telephone and Internet positively influences both groups’ financial development, whereas mobile cellular causes a negative effect in high-income countries, but a positive effect in middle- & low-income countries. Second, the growth of the Internet and telephones raises the financial development in all regions, while mobile cellular growth positively affects financial development only in Africa. Finally, strong evidence appears that the PSTR models capture the smooth non-linear effects of ICT diffusion on financial development, in which the effect of ICT diffusion on financial development is positive in the lower level of ICT diffusion, but turns negative in the higher level of ICT diffusion.     

Digital knowledge generation and the appropriability trade-off

The introduction of information and communication technologies (ICT) has changed in depth the organization of the generation of knowledge reducing significantly knowledge absorption cost and improving knowledge interactions. The digital generation of knowledge relies on the systematic access and use of the stock of quasi-public knowledge. ICT enable to reconsider the knowledge appropriability trade-off as it helps to better appreciate the positive role of knowledge spillovers in the recombinant generation of new knowledge, next to the well-known negative effects of the limited appropriability of knowledge on revenues and hence incentives to innovate. This new analytical framework calls for an augmented role of telecommunications policy that should take into account the positive effects of knowledge connectivity on the generation of knowledge.     

The impact of regional ICT development on job quality of the employee in China

The paper matches the province-level ICT development with the micro-level data of the China Family Panel Studies (CFPS), uses multiple indicators to measure ICT development and job quality, and investigates the impact of regional ICT development on job quality of the employee. The research conclusions are as follows: First of all, ICT development has a significant positive impact on job quality of the employee. After a series of robustness tests and dealing with endogeneity issues, the research conclusion continues to be valid. Second, when the job quality of the employee is poor, the promotion of ICT development is relatively strong. Third, ICT development has an indirect impact on job quality through the Internet awareness. Finally, ICT development has a relatively strong role in promoting job quality of women, older, non-agricultural, and medium-skill employees. From the policy perspective, in order to improve the job quality of the employee, we suggest promoting ICT development, narrowing the digital gap, increasing investment in education, and taking into account the different characteristics of employees.     

Foreign direct investment,information technology and economic growth dynamics in Sub-Saharan Africa

The research assesses how information and communication technology (ICT) modulates the effect of foreign direct investment (FDI) on economic growth dynamics in 25 countries in Sub-Saharan Africa for the period 1980–2014. The employed economic growth dynamics are Gross Domestic Product (GDP) growth, real GDP and GDP per capita while ICT is measured by mobile phone penetration and internet penetration. The empirical evidence is based on the Generalised Method of Moments. The study finds that both internet penetration and mobile phone penetration overwhelmingly modulate FDI to induce overall positive net effects on all three economic growth dynamics. Moreover, the positive net effects are consistently more apparent in internet-centric regressions compared to “mobile phone”-oriented specifications. In the light of negative interactive effects, net effects are decomposed to provide thresholds at which ICT policy variables should be complemented with other policy initiatives in order to engender favourable outcomes on economic growth dynamics. Practical and theoretical implications are discussed.     

Do ICTs drive wealth inequality? Evidence from a dynamic panel analysis

Surprisingly, little is known about the cross-country effect of information and communication technology (ICT) on wealth inequality. At the same time, there is some tentative evidence suggesting that information and communication technology is positively correlated with income inequality. However, whether and how ICT affects wealth inequality is less explored, particularly because of the lack of reliable data on wealth inequality. This paper, therefore, fills this gap and contributes to this new literature by investigating the effect of ICT on wealth inequality in a sample of 45 developed and developing countries over the period 2000–2017. ICT is measured with six different indicators (including internet penetration, mobile penetration, ICT service exports, the ICT index, ICT quality, and ICT quantity), while wealth inequality is measured with three different indicators (comprising billionaire wealth to GDP, the Top 1% wealth share, and the Top 10% wealth share). The empirical analysis is based on the Generalised Method of Moments, and the results show that ICT increases wealth inequality. Furthermore, we show that democracy mitigates the increasing effect of ICT on wealth inequality. This result suggests that improving democracy in both developed and developing countries is an effective mechanism for mitigating the effects of ICT on wealth inequality. Therefore, we encourage efforts to implement democratic institutions that ensure respect for citizens' freedoms, greater democratic accountability, and executive constraints that allow for a more egalitarian distribution of wealth.     

Inclusive growth in Sub-Saharan Africa: Exploring the interaction between ICT diffusion,and financial development

Despite the momentous rise in ICT diffusion, and financial development in sub-Saharan Africa (SSA), their plausible joint effect on inclusive growth have not been explored, leaving a lacuna in the literature. This study, therefore, examines the direct and indirect effects of ICT diffusion on inclusive growth in 42 SSA countries over the period 1980–2019. We provide evidence robust to several specifications from the dynamic system GMM to show that: (i) ICT skills, access and usage induce inclusive growth in SSA, and (ii) the effects of ICT skills, access and usage are enhanced in the presence of financial development. These findings remain the same when we focussed on financial institution access. Policy recommendations are provided in line with the region's green growth agenda and striving efforts at improving socioeconomic development.     

Intangible capital,ICT and sector growth in China

This paper explores how intangible capital affects the growth of ICT-intensive sectors in China by examining 29 sectors in 30 regions for the years 2003–2015. It is shown that the value added in ICT-intensive sectors in China will grow faster in regions with faster development of intangible capital. This effect is robust to alternative measures of intangible capital and ICT intensity indicators, and even if other region-level determinants of sector growth such as human capital, non-ICT physical capital and financial market development are taken into consideration. The findings imply that Chinese policy makers should aim for not only more ICT investment but also the development of intangible capital.     

Driving information communication technology for tax revenue mobilization in Sub-Saharan Africa

This study explores whether increasing Information and Technology Communication (ICT) boosts government revenue mobilization for sustainable development in 48 Sub-Saharan African countries from 2004 to 2020. While total tax revenue non-resource as a percentage of GDP and tax revenue as a percentage of GDP are used to proxy for tax revenue mobilization, three ICT measures are used, namely; the telephone penetration rate, the mobile phone penetration rate and internet penetration rate. To perform the analysis, we adopt the Generalized Method of Moments (GMM). The empirical findings are as follows. First, while the calculated net impacts are substantially positive, the corresponding marginal ICT effects utilized for calculating net effects are extremely negative. Second, an extensive study is carried out to determine complementing policy thresholds. These thresholds include: 21.959 (per 100 people) telephone penetration for total income from tax revenue; 16.333 (per 100 people) internet penetration for total income from tax; 21.125 internet penetration (per 100 people) for the income from the tax on non-resource income. This study has policy relevance, and implications as the penetration of the ICT rate can be influenced by policies to mobilize government revenue effectively.     

Female participation in African labor markets: The role of information and communication technologies

This article investigates the effects of information and communication technologies (ICT) on female labor force participation in a sample of 48 African countries. We specify and estimate linear regression and dynamic panel data models with fixed effects (FE) and system-generalized method of moments (SYS-GMM) estimation over the period 2001–2017. The three main results are that ICT use (mobile phone and internet) significantly stimulates female labor force participation in Africa; this effect is enhanced by financial development and female education; the effect of ICT on female employment in Africa is strongest in the industrial sector. These results remain robust to the provision of social, cultural, and institutional variables.     

Convergence and determinants of ICT development in case of emerging market economies

This paper aims to examine the convergence of ICT development in the case of 27 emerging market economies (EMEs) using annual data from 2000 to 2018. First, by employing Phillips-Sul (PS) panel convergence test, the results not only support the evidence of convergence in ICT development but also find convergence in the composition of ICT development known as ICT access and ICT use. Second, the study identifies factors such as per capita income, human capital, and FDI which significantly affect ICT development. Third, results based on stochastic conditional convergence reveal that EMEs countries are not only converging among themselves but also ‘catch-up’ to the OECD countries.     

Harnessing digital technologies for poverty reduction. Evidence for low-income and lower-middle income countries

This paper contributes to understanding the relationship between ICT deployment and poverty alleviation in developing countries. It assess the digital technologies contribution to poverty reduction, through different channels of impact, like education, labor market, income and ICT-trade related activities.Using the sample of 40 developing countries between 1990 and 2019, it relies on macro data extracted from the World Bank Development Indicators (2021) and the World Telecommunication/ICT Indicators Database (2020). Methodological framework combines time trend analysis and locally weighted polynomial smoother, logistic growth model, and panel regression modelling techniques. Our major findings suggest growing ICT deployment, school enrolments, and increases in material wealth are significant drivers of poverty eradication in developing economies. However, the impact of digitalization on poverty is neither direct nor immediate. Therefore, we claim that national and local authorities, together with civil society must consider ICT as a key element of their broad development strategies.     

Tax breaks for incentive pay,productivity and wages: Evidence from a reform in Italy

This paper analyses the impact of a tax break on incentive pay (introduced in Law n. 208/2015) on labour productivity and average wages in Italian firms. We use a unique source of firm-level information drawn from a large representative survey of Italian firms merged with the ORBIS archive. By applying difference-in-differences methods, we obtain the following results. First, the tax break has a positive effect on both labour productivity and average wages, although the positive effect on average wages is not confirmed by robustness tests. Second, productivity impacts are mainly driven by family firms in northern regions, where firms benefit from the more dynamic business environment in which they operate. These results take into account unobserved heterogeneity and endogeneity issues.     

Does ICTs decrease the spread of informal economy in Africa?

This paper assesses the effect of information and communication technologies (ICTs) on the informal economy. We applied the Generalized Method of Moments (GMM) on a sample of 45 African countries from 2000 to 2017. According to the findings, the use of ICTs (mobile phone and internet) decreases the spread of the informal economy in Africa. These results are robust to a battery of robustness checks. Furthermore, the results of the mediation analysis show that the effect of ICTs on the informal economy is mediated by financial development, human capital and control of corruption. From a policy perspective, we suggest a quantitative and qualitative consolidation of technological infrastructures, for a sustainable mitigation of the rise of informal sector in Africa.     

Small is big in ICT: The impact of R&D on productivity

We examine the contribution of R&D to firm productivity in a large panel of European firms and study its variation with the age, size, and sub-sector of firms. We find that R&D capital in ICT firms has a larger effect on revenue when compared to non-ICT firms. At the firm level, our results suggest that, surprisingly, smaller and older ICT firms benefit the most from R&D. Small but mature ICT firms are likely to dominate market niches, and small size may enable them to be flexible and adaptable which helps them respond to technological opportunities to develop innovative products and services. This has important implications for public policy based upon firm age.     

How advanced are Italian regions in terms of public e-services? The construction of a composite indicator to analyze patterns of innovation diffusion in the public sector

This paper applies an open and transparent methodology to construct a composite indicator for the analysis of the diffusion of ICT in the public sector and the development of public e-services across Italian regions. This methodology, based on OECD/EC-JRC Handbook and incorporating experts′ opinion into a Data Envelopment Analysis, will allow us to define a ranking of Italian regions in terms of ICT adoption and of e-service development. Data are obtained by merging four different surveys carried out by Between Co. (2010–2011) and Istat – Italy′s National Bureau of Statistics (2009). We add to extant empirical literature in three ways. First, we offer a comprehensive measurement of advances in digital government that is not circumscribed to a single domain (e.g. administrative procedures of public administrations) but is rather aimed to capture a wide spectrum of public e-services (e-government, e-education, Intelligent Transport Systems, e-health). Second, we tackle a major drawback of existing statistics and benchmarking studies which are largely based on the count of services provided online, by including more sophisticated indicators on the quality of services offered and on back office changes. The results – both in terms of scores and regional rankings – highlight the presence of different patterns of adoption and use of public e-services at the local level. Third, we offer a rich account of the extreme heterogeneity of public e-service development and of the underlying technological and organizational change at the sub-national level, and hence provide a basis for the differentiating policy measures across regions.