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Labor productivity impact of Internet infrastructure: evidence from a panel data

Napalkov, Nikita LU (2017) NEKP01 20171
Department of Economics
Abstract
The study aims to shed more light on the relationship between Internet penetration and labor productivity by analyzing the aggregate cross-country panel data available for a wide range of countries in the period of 2001-2015. An overview of hypothetical mechanisms behind the communication technologies’ impact on productivity is provided, while the Augmented Solow model is used as a theoretic framework which motivates the choice of variables for empirical analysis. The estimates are obtained by using a selection of econometric estimators: fixed-effects OLS, mean-group common correlated effects and "Difference GMM" for additional robustness. Extensive empirical analysis is performed in order to account for certain well-known factors which... (More)
The study aims to shed more light on the relationship between Internet penetration and labor productivity by analyzing the aggregate cross-country panel data available for a wide range of countries in the period of 2001-2015. An overview of hypothetical mechanisms behind the communication technologies’ impact on productivity is provided, while the Augmented Solow model is used as a theoretic framework which motivates the choice of variables for empirical analysis. The estimates are obtained by using a selection of econometric estimators: fixed-effects OLS, mean-group common correlated effects and "Difference GMM" for additional robustness. Extensive empirical analysis is performed in order to account for certain well-known factors which can cause a bias in the estimates. When using a "penetration index" comprising a few dimensions of a country’s Internet development as a main variable of interest, the paper finds significant positive effect only in developed countries’ sample. Difference GMM estimates, however, are not significant. Additional analysis suggests that there may be a more pronounced connection between mobile subscriptions and labor productivity (and more than just in the developed countries). The independent variables’ estimates all have a theoretically expected signs. The results are fairly robust and allow a cautiously optimistic view on the relationship between Internet development and labor productivity growth. Nevertheless the extent of effect may sensitive to some unobserved country characteristic or industry. (Less)
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author
Napalkov, Nikita LU
supervisor
organization
course
NEKP01 20171
year
type
H2 - Master's Degree (Two Years)
subject
keywords
Common correlated effects, Augmented Solow model, productivity growth, Internet penetration, dynamic panel data
language
English
id
8924163
date added to LUP
2017-09-12 11:52:07
date last changed
2017-09-12 11:52:07
@misc{8924163,
  abstract     = {The study aims to shed more light on the relationship between Internet penetration and labor productivity by analyzing the aggregate cross-country panel data available for a wide range of countries in the period of 2001-2015. An overview of hypothetical mechanisms behind the communication technologies’ impact on productivity is provided, while the Augmented Solow model is used as a theoretic framework which motivates the choice of variables for empirical analysis. The estimates are obtained by using a selection of econometric estimators: fixed-effects OLS, mean-group common correlated effects and "Difference GMM" for additional robustness. Extensive empirical analysis is performed in order to account for certain well-known factors which can cause a bias in the estimates. When using a "penetration index" comprising a few dimensions of a country’s Internet development as a main variable of interest, the paper finds significant positive effect only in developed countries’ sample. Difference GMM estimates, however, are not significant. Additional analysis suggests that there may be a more pronounced connection between mobile subscriptions and labor productivity (and more than just in the developed countries). The independent variables’ estimates all have a theoretically expected signs. The results are fairly robust and allow a cautiously optimistic view on the relationship between Internet development and labor productivity growth. Nevertheless the extent of effect may sensitive to some unobserved country characteristic or industry.},
  author       = {Napalkov, Nikita},
  keyword      = {Common correlated effects,Augmented Solow model,productivity growth,Internet penetration,dynamic panel data},
  language     = {eng},
  note         = {Student Paper},
  title        = {Labor productivity impact of Internet infrastructure: evidence from a panel data},
  year         = {2017},
}