Information Technology and Polarization: Analysis of the Heterogeneous Effects Associated with Differences in Firm-Size, Industrial Sector and the Role of IT (in Korean)

Ilsoon Shin () and Sang Won Lee ()
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Ilsoon Shin: Inha University
Sang Won Lee: Inha University

Economic Analysis (Quarterly), 2006, vol. 12, issue 4, 77-111

Abstract: The rapidly growing IT industry is one of the important factors for an understanding of the increasing polarization of the Korean economy since the 1990's. In this study, we investigate the characteristics of domestic IT use to find, inter alia, whether this phenomenon of polarization is likely to be moderated or become more prominent in future. As objects of our analysis, we select IT's heterogeneous effects arising from diverse firm-size industrial sector, and IT's role using data on large and SMEs. The results are as follows. First, the existing polarization between large and S&M firms is being widened by IT's diverse effects on productivity. Second, while SMEs show large IT effects in the service sector, large firms reap their major IT effects in the manufacturing sector. Finally, we find a phenomenon of the differentiation of the effects of IT according to use in that compared with the basic (first-order) IT effects realized in automation and corporate decision-making, the complementary IT effects achieved in organization and process improvement are shown to be quite weak.

Keywords: IT investment; Polarization; Large Firm and SME; Firm-Size; Intangible Assets (search for similar items in EconPapers)
JEL-codes: D24 O33 (search for similar items in EconPapers)
Date: 2006
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