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dc.titleHeterogeneous Returns to ICT Capital: Insights from Colombian Manufacturing Firms
dc.contributor.authorGallego, Juan Miguel
dc.contributor.authorNieves, Alejandro
dc.contributor.authorVargas, Fernando
dc.contributor.authorDíaz, Lina M.
dc.contributor.authorSaboin, José Luis
dc.contributor.orgunitCountry Department Andean Group
dc.coverageColombia
dc.coverageColombia
dc.date.available2025-01-31T00:01:00
dc.date.issue2024-12-31T00:12:00
dc.description.abstractThe persistent productivity gap between Latin America and the Caribbean and high-income countries is partially attributed to low levels of innovation and limited adoption of technologies, such as information and communication technologies (ICT). ICT capital has been shown to enhance firm performance, yet its role in emerging markets remains underexplored. In this study, we analyze the impact of ICT capital on output in Colombian manufacturing firms from 2013 to 2018. Using an augmented production function, we estimate the output elasticity of ICT capital while addressing potential endogeneity and measurement concerns. Here, we show that ICT capital contributes significantly to output, with elasticities comparable to non-ICT capital and labor. The results reveal substantial heterogeneity: innovative, high-tech, exporting, and big firms have higher ICT capital elasticities than their noninnovative, low-tech, nonexporting, and smaller counterparts. These patterns suggest that complementarities exist between ICT and firms assets related to innovation, export orientation, and growth. The findings presented here contribute to the literature on ICT capitals role in firm productivity and inform policy making by emphasizing the need for different strategies to foster digital transformation in SMEs and in low-tech sectors.
dc.format.extent45
dc.identifier.doihttp://dx.doi.org/10.18235/0013386
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/Heterogeneous-Returns-to-ICT-Capital-Insights-from-Colombian-Manufacturing-Firms.pdf
dc.language.isoen
dc.publisherInter-American Development Bank
dc.subjectInformation and Communication Technology
dc.subjectSmall Business
dc.subjectLabor
dc.subjectProductivity
dc.subjectLabor Force
dc.subjectManufacturing Industry
dc.subjectWage
dc.subjectInnovation
dc.subjectRating
dc.subject.jelcodeD24 - Production • Cost • Capital • Capital, Total Factor, and Multifactor Productivity • Capacity
dc.subject.jelcodeL25 - Firm Performance: Size, Diversification, and Scope
dc.subject.jelcodeO33 - Technological Change: Choices and Consequences • Diffusion Processes
dc.subject.keywordsICT;ICT Capital;Productivity;Firm Heterogeneity;output elasticities;Technology adoption;Andean Region
idb.identifier.pubnumberIDB-TN-03078
idb.operationRG-T3717
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