Did the Reduction of ICT Investment Due to the 2008 Economic Crisis Affect the Innovation Performance of Firms? An Exploratory Analysis Based on Firm Data for the European Glass, Ceramics, and Cement Industry

Spyros Arvanitis and Euripidis N. Loukis

No 15-391, KOF Working papers from KOF Swiss Economic Institute, ETH Zurich

Abstract: In this paper we investigate empirically, first, the characteristics of the firms that reduced their ICT investment due to the 2008 crisis, particularly the firms? ICT-related characteristics in terms of ICT budget, skills and applications used. The analysis of the ICT characteristics that may influence the likelihood of having reduced ICT investment as a consequence of the crisis is primarily explorative, thus driven by available data and economic intuition. The second research question we examine empirically refers to the possibility that an economic crisis could affect innovation performance through the ICT investment channel. In connection with this, it is also interesting to analyze the ICT characteristics that are associated with ICT-enabled innovation performance. This is the third research question of this paper. Our study is based on firm data from the glass/ceramics/cement industry in six European countries. We find that ICT-related crisis vulnerability correlates positively with decreasing ICT budgets (pro-cyclical investment behaviour), the existence of skill deficits in ICT, the awareness of and interest in novel ICT applications that presumably request much additional ICT investment, the exposure to strong price competition and the strong presence in international markets, in which activities have significantly decreased due to the crisis. Further, statistically significant negative relationship between ICT-enabled product innovation and crisis vulnerability (pro-cyclical behaviour) is found only for new products or services that contain ICT components, and are therefore directly affected by crisis-related decreasing product demand. Employment of specialized ICT personnel, ICT outsourcing (only for process innovation), competition (only for product innovation), and the use of some ICT applications specific to the kind of innovation pursued are ICT characteristics that positively correlate with ICT-enabled innovation.

Keywords: Economic crisis; Information and communication technologies (ICT); Innovation; ICT-enabled innovation (search for similar items in EconPapers)
Pages: 31 pages
Date: 2015-08
New Economics Papers: this item is included in nep-bec, nep-cse, nep-eur, nep-ict, nep-ino and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://dx.doi.org/10.3929/ethz-a-010497771 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kof:wpskof:15-391

Access Statistics for this paper

More papers in KOF Working papers from KOF Swiss Economic Institute, ETH Zurich Contact information at EDIRC.
Bibliographic data for series maintained by ().