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Internet and enterprise productivity: evidence from Latin America

Juan Jung (), Enrique Lopez-Bazo () and Matteo Grazzi ()
Additional contact information
Juan Jung: AQR-IREA, Universitat de Barcelona, Av. Diagonal 690, 08034 Barcelona, Spain.
Matteo Grazzi: Competitiveness, technology and innovation division - Inter-American Development Bank, 1300 New York Avenue, NW 20577 Washington DC, USA.

No 201709, IREA Working Papers from University of Barcelona, Research Institute of Applied Economics

Abstract: This paper tests three hypotheses regarding the link between internet and firm productivity: i) internet adoption and use constitute a source of productivity growth for firms in Latin America, ii) the intensity of its use also matters, and iii) the link between the new technologies and productivity levels is not uniform over the whole productivity distribution. The evidence in this paper fills the gap of scarce and fragmented literature focused on Latin America, and is aligned with previous research for more developed regions which has generally recognized that Information and Communication Technologies (ICTs) have radically changed how modern business are conducted, benefitting firm performances through several channels, such as increasing the efficiency of internal processes, expanding market reach or increasing innovation. Our findings suggest that low-medium productive firms benefit more from an expansion in internet adoption and use, in comparison with the most productive ones. If this evidence is supposed to reflect long-term effects, then public policies oriented to massify internet adoption and promote internet use intensively will surely contribute to reduce inequalities of enterprise’s productivity levels, promoting a level playing field among Latin American firms, something especially relevant for the most unequal region of the world.

Keywords: ICT; Internet; Productivity; firms; Latin America JEL classification:D22; O31; O33; O54. (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-eff, nep-ino, nep-pay, nep-sbm and nep-tid
Date: 2017-05, Revised 2017-05
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