What's Spurious, What's Real? Measuring the Productivity Impacts of ICT at the Firm-Level

In order to assess the productivity effects of information and communication technologies (ICT), regressions based on cross?sectional firm?level data may yield unreliable results for the commonly employed production function framework. In this paper, various estimation biases and econometric strategies to overcome their sources are discussed. The effects are illustrated on the basis of a representative set of panel data for German service firms. The application of a suited SYS?GMM estimator yields evidence for significant productivity effects of ICT which are substantially smaller though than those suggested by cross?section or pooled OLS estimates. --Productivity,Information and Communication Technologies,Production Function Estimation,Panel Data,Services

Do Computers Call for Training? Firm-level Evidence on Complementarities Between ICT and Human Capital Investments

This paper explores whether investments in information and communication technologies (ICT) and firm?sponsored training programmes are complementary. Three approaches are applied to panel data from German service companies for the time period 1994?98. Results for a system of interrelated factor demands indicate that training complements ICT but not other capital goods. SYS?GMM estimates of production functions reveal that ICT capital is most productive if complemented by training measures in skill?intensive firms. Comparing the impacts on productivity and wage costs shows that ICT raise the profitability of training high?skilled employees. --Productivity,Training,Information and Communication Technologies,Complementarities,Services,Panel Data

Technology Use, Organisational Flexibility and Innovation: Evidence for Germany

This paper investigates to what extent the usage of information and communication technology (ICT) fosters innovation activities by facilitating more flexible organisational structures in firms. We distinguish between functional flexibility (the ability of workers to co-operate and take decentralised decisions) and numerical flexibility (the reduction of fixed costs, mainly due to outsourcing business processes). Our results from a large and representative data set of firms in Germany show that ICT use is associated with an increase in both types of flexibility but the implications for innovation activities differ. Functional flexibility is strongly positively associated with product innovations. In contrast, numerical flexibility allows firms to ?buy? innovations in the short run, but reduces innovative capacity in the longer run. --ICT usage,flexibility,innovations

Testing for Competition Among German Banks

Given the marked reduction in the number of banks in Germany during recent years, the study estimates competitive behavior in the German banking system by applying an empirical method developed by Panzar and Rosse (1987). By estimating the banks' reduced form revenue functions, the sums of their estimated factor price elasticities which constitute the so called H-statistics provide information about banks' competitive behavior. Based on the micro data of banks? balance sheets and profit and loss accounts for the years 1993-1998, the hypotheses of perfect collusion as well as of perfect competition can be rejected by means of panel-econometric estimations. For individual categories of banks significant differences were found with respect to savings banks and cooperative banks, on the one hand, and credit banks, on the other, as well as for several size categories. However, despite the decrease in the number of banks in Germany during the investigated period and a slight increase in concentration during that time, there are no clear indications of a different competitive behavior in the second half of the time period under investigation. --

Does Experience Matter? Innovations and the Productivity of ICT in German Services

In this paper, it is argued that ICT investment is closely linked with complementary innovations and most productive in firms with innovative experience. In an analysis based on firm–level panel data covering the period 1994–99, system GMM estimates for an extended production function framework reveal significant productivity effects of ICT in the German service sector. Moreover, there is strong support for the hypothesis that the experience gained from past process innovations is a specific feature that makes ICT investment more productive. The results suggest that ICT may have been contributing to productivity differentials between firms

ICT, Innovation and Business Performance in Services: Evidence for Germany and the Netherlands

Using panel data for German and Dutch firms from the services sector, this paper analyses the importance of ICT capital deepening and innovation for productivity. We employ a model that takes into account that innovation and ICT use may be complementary. The results show that the contribution of ICT capital deepening is raised when firms combine ICT use and technological innovations on a more permanent basis. Moreover, the joint impact of ICT use and permanent technological innovation on productivity appears to be of the same order of magnitude in the two countries. However, the direct impacts of innovation on multi-factor productivity seems to be more robust for Germany than for the Netherlands. --Productivity,Information and Communication Technologies,Innovation,Services,Panel Data

Technology Use, Organisational Flexibility and Innovation : Evidence for Germany

This paper investigates to what extent the usage of information and communication technology (ICT) fosters innovation activities by facilitating more flexible organisational structures in firms. We distinguish between functional flexibility (the ability of workers to co-operate and take decentralised decisions) and numerical flexibility (the reduction of fixed costs, mainly due to outsourcing business processes). Our results from a large and representative data set of firms in Germany show that ICT use is associated with an increase in both types of flexibility but the implications for innovation activities differ. Functional flexibility is strongly positively associated with product innovations. In contrast, numerical flexibility allows firms to 'buy' innovations in the short run, but reduces innovative capacity in the longer run

Die deutsche Wachstumsschwäche: Liegt die Ursache beim Finanzmarkt?

Eine Studie von Goldman/Sachs setzt sich mit den Ursachen der deutschen Wachstumsschwäche auseinander. Sie wartet dabei mit einer Erklärung auf, die in der wirtschaftspolitischen Öffentlichkeit starke Beachtung gefunden hat . Danach läge das Kernproblem der deutschen Volkswirtschaft nicht – wie fast durchweg vermutet – auf den möglicherweise überregulierten Arbeitsmärkten, sondern auf dem deutschen Finanz- bzw. Bankenmarkt. Ist diese These stichhaltig? --

Do Computers Call for Training? Firm-level Evidence on Complementarities Between ICT and Human Capital Investments

This paper explores whether investments in information and communication technologies (ICT) and firms sponsored training programmes are complementary. Three approaches are applied to panel data from German service companies for the time period 1994. Results for a system of interrelated factor demands indicate that training complements ICT but not other capital goods. SYS GMM estimates of production functions reveal that ICT capital is most productive if complemented by training measures in skill intensive firms. Comparing the impacts on productivity and wage costs shows that ICT raise the profitability of training high skilled employees

What’s Spurious, What’s Real? Measuring the Productivity Impacts of ICT at the Firm-Level

In order to assess the productivity effects of information and communication technologies (ICT), regressions based on cross–sectional firm–level data may yield unreliable results for the commonly employed production function framework. In this paper, various estimation biases and econometric strategies to overcome their sources are discussed. The effects are illustrated on the basis of a representative set of panel data for German service firms. The application of a suited SYS–GMM estimator yields evidence for significant productivity effects of ICT which are substantially smaller though than those suggested by cross–section or pooled OLS estimates