IDEAS home Printed from https://ideas.repec.org/a/eee/telpol/v42y2018i2p107-115.html
   My bibliography  Save this article

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

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0308596117302355
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.telpol.2017.08.007?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Lee, Changjun & Lee, Daeho & Hwang, Junseok, 2015. "Platform openness and the productivity of content providers: A meta-frontier analysis," Telecommunications Policy, Elsevier, vol. 39(7), pages 553-562.
    2. Basole, Rahul C. & Park, Hyunwoo & Barnett, Brandon C., 2015. "Coopetition and convergence in the ICT ecosystem," Telecommunications Policy, Elsevier, vol. 39(7), pages 537-552.
    3. Emmanouil Stiakakis & Angelo Sifaleras, 2013. "Combining the priority rankings of DEA and AHP methodologies: a case study on an ICT industry," International Journal of Data Analysis Techniques and Strategies, Inderscience Enterprises Ltd, vol. 5(1), pages 101-114.
    4. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-332.
    5. Kyoungsun Lee & Yuri Park & Daeho Lee, 2016. "Effect of the ICT Ecosystem Structure on the Sustainable Growth of ICT Firms: A Metafrontier Analysis on China, South Korea, the United States, and Japan," Sustainability, MDPI, vol. 8(5), pages 1-9, May.
    6. Barua, Anitesh & Brockett, P. L. & Cooper, W. W. & Deng, Honghui & Parker, Barnett R. & Ruefli, T. W. & Whinston, A., 2004. "DEA evaluations of long- and short-run efficiencies of digital vs. physical product "dot com" companies," Socio-Economic Planning Sciences, Elsevier, vol. 38(4), pages 233-253, December.
    7. George Battese & D. Rao & Christopher O'Donnell, 2004. "A Metafrontier Production Function for Estimation of Technical Efficiencies and Technology Gaps for Firms Operating Under Different Technologies," Journal of Productivity Analysis, Springer, vol. 21(1), pages 91-103, January.
    8. Koslowski, Thomas G. & Longstaff, Patricia H. & Vidal, Miguel & Grob, Thomas, 2012. "Resilience analysis of the ICT ecosystem," 23rd European Regional ITS Conference, Vienna 2012 60390, International Telecommunications Society (ITS).
    9. Fransman,Martin, 2010. "The New ICT Ecosystem," Cambridge Books, Cambridge University Press, number 9780521171205, September.
    10. George E. Battese & D. S. Prasada Rao, 2002. "Technology Gap, Efficiency, and a Stochastic Metafrontier Function," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 1(2), pages 87-93, August.
    11. Lee, Daeho & Hwang, Junseok, 2011. "Network neutrality and difference in efficiency among Internet application service providers: A meta-frontier analysis," Telecommunications Policy, Elsevier, vol. 35(8), pages 764-772, September.
    12. Ahreum Hong & Daeho Lee & Junseok Hwang, 2011. "Metafrontier Production Function Analysis of Horizontal and Vertical Integration in Korea's Cable TV Industry," Journal of Media Economics, Taylor & Francis Journals, vol. 24(4), pages 221-236, November.
    13. Gaaitzen J. De Vries & Michael Koetter, 2011. "ICT Adoption and Heterogeneity in Production Technologies: Evidence for Chilean Retailers," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 73(4), pages 539-555, August.
    14. Clark, David D. & Claffy, K.C., 2015. "Anchoring policy development around stable points: An approach to regulating the co-evolving ICT ecosystem," Telecommunications Policy, Elsevier, vol. 39(10), pages 848-860.
    15. Yang, Anhyuk & Lee, Daeho & Hwang, Junseok & Shin, Jungwoo, 2013. "The influence of regulations on the efficiency of telecommunications operators: A meta-frontier analysis," Telecommunications Policy, Elsevier, vol. 37(11), pages 1071-1082.
    16. Ferreira & Oliveira, 2016. "Portfolio efficiency analysis with SFA: the case of PSI-20 companies," Applied Economics, Taylor & Francis Journals, vol. 48(1), pages 1-6, January.
    17. Tsai, Hsiang-Chih & Chen, Chun-Mei & Tzeng, Gwo-Hshiung, 2006. "The comparative productivity efficiency for global telecoms," International Journal of Production Economics, Elsevier, vol. 103(2), pages 509-526, October.
    18. Fransman,Martin, 2010. "The New ICT Ecosystem," Cambridge Books, Cambridge University Press, number 9780521191319, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Inyoung Park & Jieon Lee & Jungwoo Nam & Yuri Jo & Daeho Lee, 2022. "Which networking strategy improves ICT startup companies' technical efficiency?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 2434-2443, September.
    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.
    3. Zhang, Zhouyi & Song, Yi & Cheng, Jinhua & Zhang, Yijun, 2023. "Effects of heterogeneous ICT on critical metal supply: A differentiated perspective on primary and secondary supply," Resources Policy, Elsevier, vol. 83(C).
    4. Hongbum Kim & Yuri Jo & Daeho Lee, 2021. "R&D, Marketing, Strategic Planning, or Human Resources? Which CEO Career Is Most Helpful for the Economic Sustainability of ICT Startups in South Korea?," Sustainability, MDPI, vol. 13(5), pages 1-14, March.
    5. Vu, Khuong & Amann, Juergen, 2024. "An analysis of ICT hardware manufacturing in industrialized economies: Growth patterns, productivity performance, and driving Forces," Telecommunications Policy, Elsevier, vol. 48(1).
    6. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kyoungsun Lee & Yuri Park & Daeho Lee, 2016. "Effect of the ICT Ecosystem Structure on the Sustainable Growth of ICT Firms: A Metafrontier Analysis on China, South Korea, the United States, and Japan," Sustainability, MDPI, vol. 8(5), pages 1-9, May.
    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.
    3. 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.
    4. Yang, Anhyuk & Lee, Daeho & Hwang, Junseok & Shin, Jungwoo, 2013. "The influence of regulations on the efficiency of telecommunications operators: A meta-frontier analysis," Telecommunications Policy, Elsevier, vol. 37(11), pages 1071-1082.
    5. Ryu, Min Ho & Cho, Yongsun & Lee, Daeho, 2019. "Should small-scale online retailers diversify distribution channels into offline channels? Focused on the clothing and fashion industry," Journal of Retailing and Consumer Services, Elsevier, vol. 47(C), pages 74-77.
    6. Hana Kim & Daeho Lee & Min Ho Ryu, 2018. "An Optimal Strategic Business Model for Small Businesses Using Online Platforms," Sustainability, MDPI, vol. 10(3), pages 1-11, February.
    7. Inyoung Park & Jieon Lee & Jungwoo Nam & Yuri Jo & Daeho Lee, 2022. "Which networking strategy improves ICT startup companies' technical efficiency?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 2434-2443, September.
    8. Farnaz Pourzand & Mohammad Bakhshoodeh, 2014. "Technical effici ency and agricultural sustainability–technology gap of maize producers in Fars province of Iran," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 16(3), pages 671-688, June.
    9. Thanh Pham Thien Nguyen & Son Hong Nghiem & Eduardo Roca & Parmendra Sharma, 2016. "Efficiency, innovation and competition: evidence from Vietnam, China and India," Empirical Economics, Springer, vol. 51(3), pages 1235-1259, November.
    10. Saeid Hajihassaniasl & Recep Kök, 2016. "Scale effect in Turkish manufacturing industry: stochastic metafrontier analysis," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 5(1), pages 1-17, December.
    11. Sombat Singkharat & Aree Wiboonpongse & Yaovarate Chaovanapoonphol, 2012. "Efficiency of improved peeled longan drying technology in Thailand: A metafrontier approach," The Empirical Econometrics and Quantitative Economics Letters, Faculty of Economics, Chiang Mai University, vol. 1(3), pages 19-32, September.
    12. Bravo-Ureta, Boris E. & Higgins, Daniel & Arslan, Aslihan, 2020. "Irrigation infrastructure and farm productivity in the Philippines: A stochastic Meta-Frontier analysis," World Development, Elsevier, vol. 135(C).
    13. Mei-Ying Huang & Tsu-Tan Fu, 2013. "An examination of the cost efficiency of banks in Taiwan and China using the metafrontier cost function," Journal of Productivity Analysis, Springer, vol. 40(3), pages 387-406, December.
    14. MARCHAND, Sébastien & GUO, Huanxiu, 2014. "The environmental efficiency of non-certified organic farming in China: A case study of paddy rice production," China Economic Review, Elsevier, vol. 31(C), pages 201-216.
    15. Xiangfei Xin & Yi Zhang & Jimin Wang & John Alexander Nuetah, 2016. "Effects of Farm Size on Technical Efficiency in China's Broiler Sector: A Stochastic Meta-Frontier Approach," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 64(3), pages 493-516, September.
    16. Qian Liu & Yongmu Jiang & Carl‐Johan Lagerkvist & Wei Huang, 2023. "Extension services and the technical efficiency of crop‐specific farms in China," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 45(1), pages 436-459, March.
    17. Xi Chen & Mingzhe Pu & Yu Zhong, 2022. "Evaluating China Food’s Fertilizer Reduction and Efficiency Initiative Using a Double Stochastic Meta-Frontier Method," IJERPH, MDPI, vol. 19(12), pages 1-21, June.
    18. Ligia Alba Melo-Becerra & Antonio José Orozco-Gallo, 2017. "Technical efficiency for Colombian small crop and livestock farmers: A stochastic metafrontier approach for different production systems," Journal of Productivity Analysis, Springer, vol. 47(1), pages 1-16, February.
    19. Joachim Nyemeck BINAM & Jim GOCKOWSKI & Guy Blaise NKAMLEU, 2008. "Technical Efficiency And Productivity Potential Of Cocoa Farmers In West African Countries," The Developing Economies, Institute of Developing Economies, vol. 46(3), pages 242-263, September.
    20. Liao, Chun-Hsiung & Lien, Chun-Yu, 2012. "Measuring the technology gap of APEC integrated telecommunications operators," Telecommunications Policy, Elsevier, vol. 36(10), pages 989-996.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:telpol:v:42:y:2018:i:2:p:107-115. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/30471/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.