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Measuring efficiency and ICT ecosystem impact: Hardware vs. software industry

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  • Lee, Kyoungsun
  • Park, Yuri
  • Lee, Daeho

Abstract

The ICT industry is reshaping itself through convergence and coopetition across the ecosystem. In particular, many ICT companies have been trying to achieve both hardware and software capabilities to accelerate innovation. To understand the changes in the ICT industry, we empirically study the hardware and software industries using the ecosystem framework. We estimate the efficiency levels of the hardware and software industries in China, Japan, South Korea, and the United States (US) using stochastic frontier analysis and meta frontier analysis, and we examine the effects of the ICT ecosystem structure on efficiency levels using a Tobit regression. We find that the US, which is the global ICT leader, performs significantly better than other countries, with the biggest technology gap ratios in both hardware and software, and South Korea, which has the most hardware-centric industrial structure among the four countries, has the biggest efficiency gap between the hardware and software industries. Tobit results further reveal that a well-balanced ecosystem is important in achieving high efficiency in both hardware and software, and the effect is much higher in the software industry than in the hardware industry.

Suggested Citation

  • Lee, Kyoungsun & Park, Yuri & Lee, Daeho, 2018. "Measuring efficiency and ICT ecosystem impact: Hardware vs. software industry," Telecommunications Policy, Elsevier, vol. 42(2), pages 107-115.
    • Handle: RePEc:eee:telpol:v:42:y:2018:i:2:p:107-115
    DOI: 10.1016/j.telpol.2017.08.007
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    Cited by:

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    2. Sadaf Hafeez & Noreen Izza Arshad & Lukman Bin A B Rahim & Muhammad Farooq Shabbir & Jawad Iqbal, 2020. "Innovation in Chinese internet companies: A meta-frontier analysis," PLOS ONE, Public Library of Science, vol. 15(5), pages 1-15, May.
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    5. Yuri Jo & Won Young Chung & Daeho Lee, 2020. "The capability‐enhancing role of government‐driven industrial districts for new technology‐based firms in South Korea," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 7(3), pages 306-321, September.

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