ICT have been regarded in the literature as general purpose technologies (GPT). These technologies are drastic innovations characterized by their pervasive use in a wide range of economic sectors, as well as by their considerable potential for the development of complementary innovations. In addition, the implementation of new GPT entails a process of experimentation subject to knowledge spillovers and adoption externalities from the different adopting sectors. Therefore, the success of the implementation not only depends on a firm’s own efforts, but on the nature of its interactions with other firms. Some important economic interactions take place in the intermediate input markets.
The main objective of this project is to study the impact of the adoption of ICT on economic performance at the firm level, considering explicitly the interaction of adopting firms with their suppliers, competitors and clients in this particular segment of the economy: the intermediate input market. In particular, the project attempts to identify and quantify the importance of the adoption externalities and knowledge spillovers inherent in the introduction of ICT within the German intermediate input market, their impact on observed firms’ strategies and their overall effect on productivity and innovative behavior.
The project contributes to the firm level analysis of the economic impact of ICT by considering the role of intermediate input markets from a GPT perspective. Based on German data at the firm level and at the sectoral level, the results of the project will provide valuable insights into the firm strategies that promote or hinder the full exploitation of the benefits from the introduction of ICT. The results will be put into a European perspective and the insights will contribute to the discussion of the determinants of the European productivity slowdown observed in recent years.
Discussion and Working Papers
Cerquera, Daniel and Gordon Jochem Klein (2013), Intermediate Input Markets, ICT and Innovation in Germany: A Firm Level Analysis, ZEW Discussion Paper No. 13-013, Mannheim. Download