Who Captures Value in Digital Services?

Matias Kalm, Timo Seppälä and Jyrki Ali-Yrkkö

No 27, ETLA Brief from The Research Institute of the Finnish Economy

Abstract: Abstract In this study, we explore who creates and captures value in digital services by analyzing four such services. Our results show that there are notable variations in both value creation and value capture between the services. Similar variations are also observed in the geographical distribution of value added. The study also highlights variations in economies of scale in digital services. In some services, there are almost no variable costs, and hence, the economies of scale are very high. In other services, the economies of scale are significantly smaller. The difference in economies of scale between services partially arises because a physical product is delivered in conjunction with the digital service for some services.

Pages: 8 pages
Date: 2014-06-18
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Citations: View citations in EconPapers (2)

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