Measuring efficiency and ICT ecosystem impact: Hardware vs. software industry

Kyoungsun Lee, Yuri Park and Daeho Lee

Telecommunications Policy, 2018, vol. 42, issue 2, 107-115

Abstract: The ICT industry is reshaping itself through convergence and coopetition across the ecosystem. In particular, many ICT companies have been trying to achieve both hardware and software capabilities to accelerate innovation. To understand the changes in the ICT industry, we empirically study the hardware and software industries using the ecosystem framework. We estimate the efficiency levels of the hardware and software industries in China, Japan, South Korea, and the United States (US) using stochastic frontier analysis and meta frontier analysis, and we examine the effects of the ICT ecosystem structure on efficiency levels using a Tobit regression. We find that the US, which is the global ICT leader, performs significantly better than other countries, with the biggest technology gap ratios in both hardware and software, and South Korea, which has the most hardware-centric industrial structure among the four countries, has the biggest efficiency gap between the hardware and software industries. Tobit results further reveal that a well-balanced ecosystem is important in achieving high efficiency in both hardware and software, and the effect is much higher in the software industry than in the hardware industry.

Keywords: Stochastic frontier analysis; Meta frontier analysis; Efficiency comparison; ICT ecosystem; Hardware; Software (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (6)

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DOI: 10.1016/j.telpol.2017.08.007

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