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Industrial Agglomeration and Use of the Internet

Chia-Lin Chang, Michael McAleer and Yu-Chieh Wu
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Yu-Chieh Wu: National Chung Hsing University, Taichung, Taiwan

No 15-098/III, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: Taiwan has been hailed as a world leader in the development of global innovation and industrial clusters for the past decade. This paper investigates the effects of industrial agglomeration on the use of the internet and internet intensity for Taiwan manufacturing firms, and analyses whether the relationships between industrial agglomeration and total expenditure on internet usage for industries are substitutes or complements. The sample observations are based on 153,081 manufacturing plants, and covers 26 2-digit industry categories and 358 geographical townships in Taiwan. The Heckman selection model is used to adjust for sample selectivity for unobservable data for firms that use the internet. The empirical results from two-stage estimation show that: (1) for the industry overall, a higher degree of industrial agglomeration will not affect the probability that firms will use the internet, but will affect the total expenditure on internet usage; and (2) for 2-digit industries, industrial agglomeration generally decreases the total expenditure on internet usage, which suggests that industrial agglomeration and total expenditure on internet usage are substitutes.

Keywords: Industrial agglomeration and clusters; Global innovation; Internet penetration; Manufacturing firms; Sample selection; Incidental truncation (search for similar items in EconPapers)
JEL-codes: D22 L60 (search for similar items in EconPapers)
Date: 2015-08-17
New Economics Papers: this item is included in nep-cse, nep-geo, nep-ger, nep-ict, nep-ino, nep-sbm and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Industrial Agglomeration and Use of the Internet (2015) Downloads
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