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Competition makes IT better: evidence on when firms use it more effectively

Leonardo Iacovone, Mariana De La Paz Pereira Lopez, Marc Tobias Schiffbauer, Leonardo Iacovone, Mariana De La Paz Pereira Lopez and Marc Tobias Schiffbauer
Authors registered in the RePEc Author Service: Mariana Pereira-López and Leonardo Iacovone ()

No 7638, Policy Research Working Paper Series from The World Bank

Abstract: This paper uses a unique firm-level data set for Mexico, with information never used for research before, to assess how use of information technology (IT henceforth) influences firm performance. Further, the paper explores if, in the context of increasing competition from China, this effect is different for firms more strongly affected by competition where incentives for upgrading and innovation may be more intense. In this perspective, the paper analyzes the complementarity between IT and other changes spurred by competition, taking advantage of the exogenous shock generated by Chinese competition. The results indicate that IT use has higher effects over productivity in the case of firms facing higher competition from China, in the domestic market and in the U.S. market. Furthermore, the paper shows how these changes appear to be driven by complementary investments in innovation and organizational changes.

Keywords: International Trade and Trade Rules; Construction Industry; General Manufacturing; Pulp&Paper Industry; Textiles; Apparel&Leather Industry; Common Carriers Industry; Business Cycles and Stabilization Policies; Plastics&Rubber Industry; Food&Beverage Industry; Urban Governance and Management; Urban Housing and Land Settlements; Municipal Management and Reform; Urban Housing; Information Technology (search for similar items in EconPapers)
Date: 2016-04-13
New Economics Papers: this item is included in nep-bec, nep-com, nep-eff and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed

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Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:7638

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