The Effects of Digital-Technology Adoption on Productivity and Factor Demand : Firm-Level Evidence from Developing Countries
This paper presents firm-level estimates of revenue-based total factor productivity premiums of manufacturing firms adopting digital technology in 82 developing economies over 2002–19. The paper estimates productivity using the control function app...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2020
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/829161595512126439/The-Effects-of-Digital-Technology-Adoption-on-Productivity-and-Factor-Demand-Firm-level-Evidence-from-Developing-Countries http://hdl.handle.net/10986/34251 |
| Summary: | This paper presents firm-level estimates
of revenue-based total factor productivity premiums of
manufacturing firms adopting digital technology in 82
developing economies over 2002–19. The paper estimates
productivity using the control function approach and
assuming an endogenous revenue-based total factor
productivity process, which is a function of multiple
firm-choice variables. It estimates the effects of digital
technology adoption, learning by exporting, and managerial
experience on revenue-based total factor productivity and
factor demand. The results reject the 0 hypothesis of an
exogenous revenue-based total factor productivity process,
in favor of one in which digital technology adoption, along
with the other choice variables, affects revenue-based total
factor productivity and factor demand. The estimated
premiums are positive for 67.3 (email adoption), 54.6
(website adoption), 59.4 (learning by exporting), and 60.6
(managerial experience) percent of the sample. The
probability-adjusted median (log) revenue-based total factor
productivity premium associated with email adoption is 1.6
percent and that of website adoption is 2.2 percent, with
the latter being higher than the premiums corresponding to
exporting and managerial experience. On average, changes in
digital technology adoption, email, and website are labor
and capital augmenting. The paper also explores the role of
complementarities among the firm choice variables. |
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