IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/46479.html
   My bibliography  Save this paper

Linking ICT related Innovation Adoption and Productivity: results from micro-aggregated data versus firm-level data

Author

Listed:
  • Van Leeuwen, George
  • Polder, Michael

Abstract

E-business systems are increasingly considered as important examples of ICT related innovations embodied in software applications, the adoption of which is essential for capturing the potential fruits of several ICT externalities. For analysing the importance of this type of embodied technological progress several routes are open. One route is to look at the data that can be used. In this paper we apply the same modelling strategy to two different types of data: 1) cross-country-industry micro-aggregated data obtained after applying Distributed Micro data Analysis (DMD) and 2) firm-level data, in this case for the Netherlands. Today, the econometric analysis based on firm-level data is often more advanced and more complicated from an econometric point of view than the analysis on aggregated data. We show that DMD can be extended to enable the estimation of more complicated models that feature recent directions in micro-econometric analysis on firm-level data. Our application concerns the innovative use of E-business systems by firms. Using a rich set of cross-country-industry data constructed and tailored by DMD for this purpose, we analyse the adoption of three E-business systems (Eterprise Resourc Planning, Customer Relationship Management, Supply Chain Management). We investigate the complementarities in joint adoption and the productivity effects of adopting systems simultaneously or in isolation. The same exercise is repeated on firm-level data for the Netherlands. Our example illustrates that international benchmarking with more elaborate models on cross-country-industry panel data is feasible after using DMD to tailor the underlying firm-level data for specific research questions. This is an important result in the light of the restrictions on pooling cross-country micro data due to confidentiality rules. We find that the results are more diverging for the estimation of complementarities at the adoption stage than for the productivity effects of (joint) adoption. This result implies that measurement error and unobservable heterogeneity plays a greater role when explaining adoption pattern at the firm-level than at the aggregate level.

Suggested Citation

  • Van Leeuwen, George & Polder, Michael, 2013. "Linking ICT related Innovation Adoption and Productivity: results from micro-aggregated data versus firm-level data," MPRA Paper 46479, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:46479
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/46479/1/MPRA_paper_46479.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Lorenzo Cappellari & Stephen P. Jenkins, 2006. "Calculation of multivariate normal probabilities by simulation, with applications to maximum simulated likelihood estimation," Stata Journal, StataCorp LP, vol. 6(2), pages 156-189, June.
    2. Arthur Lewbel, 2007. "Coherency And Completeness Of Structural Models Containing A Dummy Endogenous Variable," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(4), pages 1379-1392, November.
    3. Tobias Kretschmer & Eugenio J. Miravete & Jose C. Pernias, 2012. "Competitive Pressure and the Adoption of Complementary Innovations," American Economic Review, American Economic Association, vol. 102(4), pages 1540-1570, June.
    4. Michael Polder & George van Leeuwen & Pierre Mohnen & Wladimir Raymond, 2010. "Product, Process and Organizational Innovation: Drivers, Complementarity and Productivity Effects," DRUID Working Papers 10-24, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    5. Elie Tamer, 2003. "Incomplete Simultaneous Discrete Response Model with Multiple Equilibria," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(1), pages 147-165.
    6. Mohnen, Pierre & Roller, Lars-Hendrik, 2005. "Complementarities in innovation policy," European Economic Review, Elsevier, vol. 49(6), pages 1431-1450, August.
    7. Heckman, James J, 1978. "Dummy Endogenous Variables in a Simultaneous Equation System," Econometrica, Econometric Society, vol. 46(4), pages 931-959, July.
    8. Ilsoon Shin, 2006. "Adoption of Enterprise Application Software and Firm Performance," Small Business Economics, Springer, vol. 26(3), pages 241-256, April.
    9. Lorenzo Cappellari & Stephen P. Jenkins, 2003. "Multivariate probit regression using simulated maximum likelihood," Stata Journal, StataCorp LP, vol. 3(3), pages 278-294, September.
    10. Eugenio J. Miravete & José C. Pernías, 2006. "Innovation Complementarity And Scale Of Production," Journal of Industrial Economics, Wiley Blackwell, vol. 54(1), pages 1-29, March.
    11. Milgrom, Paul & Roberts, John, 1995. "Complementarities and fit strategy, structure, and organizational change in manufacturing," Journal of Accounting and Economics, Elsevier, vol. 19(2-3), pages 179-208, April.
    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. Eric Bartelsman & George van Leeuwen & Michael Polder, 2017. "CDM using a cross-country micro moments database," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 26(1-2), pages 168-182, February.

    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. George van Leeuwen & Pierre Mohnen, 2017. "Revisiting the Porter hypothesis: an empirical analysis of Green innovation for the Netherlands," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 26(1-2), pages 63-77, February.
    2. Pierre Mohnen & Michael Polder & George van Leeuwen, 2018. "ICT, R&D and Organizational Innovation: Exploring Complementarities in Investment and Production," NBER Working Papers 25044, National Bureau of Economic Research, Inc.
    3. Pierre Mohnen & Michael Polder & George van Leeuwen, 2019. "Information and Communications Technology, R&D, and Organizational Innovation: Exploring Complementarities in Investment and Production," NBER Chapters, in: Measuring and Accounting for Innovation in the Twenty-First Century, pages 299-322, National Bureau of Economic Research, Inc.
    4. Gérard Ballot & Fathi Fakhfakh & Fabrice Galia & Ammon Salter, 2011. "The Fateful Triangle Complementarities between product, process and organizational innovation in the UK and France," Working Papers halshs-00812141, HAL.
    5. Ballot, Gérard & Fakhfakh, Fathi & Galia, Fabrice & Salter, Ammon, 2015. "The fateful triangle: Complementarities in performance between product, process and organizational innovation in France and the UK," Research Policy, Elsevier, vol. 44(1), pages 217-232.
    6. Hajivassiliou, Vassilis & Savignac, Frédérique, 2024. "Simultaneously Incomplete and Incoherent (SII) Dynamic LDV Models: With an Application to Financing Constraints and Firms’ Decision to Innovate," Journal of Econometrics, Elsevier, vol. 238(1).
    7. Hou, Jun & Mohnen, Pierre, 2013. "Complementarity between internal knowledge creation and external knowledge sourcing in developing countries," MERIT Working Papers 2013-010, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    8. Zand, Fardad & Van Beers, Cees & Van Leeuwen, George, 2011. "Information technology, organizational change and firm productivity: A panel study of complementarity effects and clustering patterns in Manufacturing and Services," MPRA Paper 46469, University Library of Munich, Germany.
    9. Aschhoff, Birgit & Sofka, Wolfgang, 2008. "Successful Patterns of Scientific Knowledge Sourcing: Mix and Match," ZEW Discussion Papers 08-033 [rev.], ZEW - Leibniz Centre for European Economic Research.
    10. Tanel Rebane, 2018. "Complementarities In Performance Between Product Innovation, Marketing Innovation And Cooperation With Clients," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 113, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    11. V A Hajivassiliou & Frédérique Savignac & Frédérique Savignac, 2019. "Novel Approaches to Coherency Conditions in Dynamic LDV Models: Quantifying Financing Constraints and a Firm's Decision and Ability to Innovate," STICERD - Econometrics Paper Series 606, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    12. Bettina Peters & Rebecca Riley & Iulia Siedschlag & Priit Vahter & John McQuinn, 2018. "Internationalisation, innovation and productivity in services: evidence from Germany, Ireland and the United Kingdom," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 154(3), pages 585-615, August.
    13. Gilli, Marianna & Mancinelli, Susanna & Mazzanti, Massimiliano, 2014. "Innovation complementarity and environmental productivity effects: Reality or delusion? Evidence from the EU," Ecological Economics, Elsevier, vol. 103(C), pages 56-67.
    14. Di Ubaldo, Mattia & Siedschlag, Iulia, 2017. "The impact of investment in innovation on productivity: firm-level evidence from Ireland," Papers WP571, Economic and Social Research Institute (ESRI).
    15. Masschelein, Stijn & Moers, Frank, 2020. "Testing for complementarities between accounting practices," Accounting, Organizations and Society, Elsevier, vol. 86(C).
    16. Arranz, N. & Arroyabe, M.F. & Li, Jun & de Arroyabe, J.C. Fernandez, 2019. "An integrated model of organisational innovation and firm performance: Generation, persistence and complementarity," Journal of Business Research, Elsevier, vol. 105(C), pages 270-282.
    17. Hottenrott, Hanna & Rexhäuser, Sascha & Veugelers, Reinhilde, 2016. "Organisational change and the productivity effects of green technology adoption," Resource and Energy Economics, Elsevier, vol. 43(C), pages 172-194.
    18. Andrew Chesher & Adam Rosen, 2012. "Simultaneous equations for discrete outcomes: coherence, completeness, and identification," CeMMAP working papers CWP21/12, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    19. Massacci, D., 2007. "Identification and Estimation in an Incoherent Model of Contagion," Cambridge Working Papers in Economics 0744, Faculty of Economics, University of Cambridge.
    20. Davide Antonioli & Grazia Cecere, 2014. "ICT and environmental innovations in a complementary fashion. Is the joint adoption by firms economically visible?," SEEDS Working Papers 1514, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Jun 2014.

    More about this item

    Keywords

    DMD; ICT; innovation; innovation complementarities; productivity;
    All these keywords.

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:pra:mprapa:46479. 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: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    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.