Workers' skill level and information technology: evidence from German service firms

This paperanalyses the link between human capitaland information technology(IT ) in the service production process. The analysis is based on 1994 cross-sectional data for 1929 German. Firms drawn from the first wave of the Mannheim Service Innovation Panel (MIP-S). Factor demand functions are used to analyse the determinants of the Firm-specific skillstructure. The empirical evidence indicates that firms with a higher IT investment to sales ratio employ a larger fraction of high-skilled workers. The relationship between IT investment and medium-skilled labour is rather weak while the unskilled labourshare is negatively related to the IT investment to sales ratio. U sing a translog production function to assess the productivity of different input factors, we find that human and informationcapital provide the most powerful contributions to output in the service sector. --Information technology,skills,labour demand,service sector

An Empirical Model of Firm Entry with Endogenous Product-Type Choices

I describe a model of entry with endogenous product-type choices. These choices are formalized as the outcomes of a game of incomplete information in which rivals\u27 differentiated products have nonuniform competitive effects on profits. I estimate the model for location choices in the video retail industry using a nested fixed-point algorithm solution. The results imply significant returns to product differentiation. Simulations illustrate the tradeoff between demand and intensified competition and the extent to which markets with more scope for differentiation support greater entry

PRODUCTIVITY DYNAMICS OF THE COLOMBIAN MANUFACTURING SECTOR

This paper analyzes the effects on Colombian manufacturing productivity of tax and foreign trade policy changes during the 1990s. Our results indicate that between 1977 and 1999, aggregate manufacturing productivity largely stagnates and even declines in some of the larger industries. There is little entry and exit of plants or reallocation of labor. The productivity stagnation can be explained by this lack of liquidation of unproductive plants combined with slow technological advance. Dynamics vary significantly across sub-sectors, however, and our findings attribute this variation primarily to within-sector output reallocation. The importance of industrial policy is large. Sector-level productivity declines coincide with protectionist policies in the form of import tariffs or beneficial tax treatments, while higher productivity levels are correlated with sectors´ increasing foreign exposure. Our finding of small productivity effects of preferential treatments further points to the insignificant role played by output reallocation across plants in stimulating productivity growth.Productivity dynamics

The Impact of Information Technology on High-Skilled Labor in Services: Evidence from Firm-Level Panel Data

This paper analyses the link between the high-skilled employment share and the level of investment in information technology (IT) in the service production process. The analysis is based on an unbalanced panel data set for 933 West German firms over the period 1994-1996. To account for firms which do not employ high-skilled labor, proxied by university graduates, fixed and random effects Tobit models are applied. We investigate whether the importance of IT varies across subsectors by allowing coefficients to differ across the main service sector industries. The empirical evidence indicates that firms with a higher IT investment to output ratio employ a larger fraction of high-skilled workers. However, the size of the IT effect on skill intensity is rather small

The Effect of Entry and Market Structure on Cellular Pricing Tactics

We test the effect of entry on the tariff choices of incumbent cellular firms. We relate the change in the breadth of calling plans between 1996, when incumbents enjoyed a duopoly market, and 1998, when incumbents faced increased competition from personal communications services (PCS) firms. Entry by PCS competitors differed across geographic markets due to the number of licenses left undeveloped as a result of the bankruptcy of some of the auctions’ winning bidders and due to variation across markets in the time required to build a sufficiently large network of wireless infrastructure. We find that incumbents increase tariff variety in markets with more entrants and that this effect is not explained by demographic heterogeneity or cost differences in maintaining calling plans across markets. We also find that incumbents are more likely to upgrade their technology from the old analog technology to the new digital technology in markets with more entry, suggesting that entry also has indirect effects on tariff choice via firms’ technology adoption decisions

Workers' Skill Level and InformationTechnology : Evidence from German Service Firms

This paper analyses the link between human capital and information technology (IT) in the service production process. The analysis is based on 1994 cross-sectional data for 1929 German firms drawn from the first wave of the Mannheim Service Innovation Panel (MIP-S). Factor demand functions are used to analyse the determinants of the firm-specific skill structure. The empirical evidence indicates that firms with a higher IT investment to sales ratio employ a larger fraction of high-skilled workers. The relationship between IT investment and medium-skilled labour is rather weak while the unskilled labourshare is negatively related to the IT investment to sales ratio. Using a translog production function to assess the productivity of different input factors, we find that human and information capital provide the most powerful contributions to output in the service sector

Public Monopoly and Economic Efficiency: Evidence from the Pennsylvania Liquor Control Board\u27s Entry Decisions

We estimate a spatial model of liquor demand to analyze the impact of government-controlled retailing on entry patterns. In the absence of the Pennsylvania Liquor Control Board, the state would have roughly 2.5 times the current number of stores, higher consumer surplus, and lower payments to liquor store employees. With just over half the number of stores that would maximize welfare, the government system is instead best rationalized as profit maximization with profit sharing. Government operation mitigates, but does not eliminate, free entry\u27s bias against rural consumers. We find only limited evidence of political influence on entry

Quantifying the Benefits of Entry into Local Phone Service,

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Mixed Pricing in Online Marketplaces

A rich theory literature predicts mixed strategies in posted prices due to standard price discrimination, search frictions, and various other rationales. While typically interpreted as implying occasional sales or price dispersion, online marketplaces enable a firm to truly use randomization as a tool in pricing, and so such behavior should be expected to arise in online settings. We investigate a case of mixed pricing across a large subset of products on a major e-commerce website. We first test for randomizing behavior, and then construct a model of price discrimination that would generate randomization as optimal behavior. We estimate the model and use it to assess pricing effects of a proposed merger in the industry

The Effect of Market Structure on Cellular Technology Adoption and Pricing

We examine how structural changes in the mobile telecommunications industry between 1996, when local markets were duopolies, and 1998, when varing degrees of regulated entry had occurred, affected firms\u27 product offerings and nonlinear pricing strategies. We relate firms\u27 digital technology adoption and the characteristics of their calling plan menus to the amount of entry in local markets. We find that entry induces firms to offer larger menus with more evenly spread plans, both directly and by accelerating the introduction of digital menus with such features. Prices decline with entry, in particular for high-valuation consumers who benefit from steeper quantity discounts