ICT and e-Business Impact in the Retail Industry - empirica

e-Business in the Retail Sectormore, for example in Luxembourg with 2% and the UK with 1.4%. Overall, non-ICTcapitalinvestments contributed positively on the growth performance in retailing. It wouldbe interesting to study these differences in greater detail, in particular the differentretailing sub-sectors, to understand how much the “in-the-box-effect” (discussed above)and shifting expenditures to different consumer goods and service classes contributed tothese results and might explain the differences between the US and European ICTimpacts.Furthermore, stricter regulations on the establishment of superstores and factoryoutlet centres in many European countries might cause impediments towards a moreconcentrated market structure in retailing when compared to the US. These results lendlittle support to the hypothesis that ICT-capital investments contributed most to positiveoutput growth in all European countries.Looking at the impacts of labour compositional change, one observes that the labourquality change component from low-skilled towards medium- and high-skilled labour gavepositive growth impacts in all countries with the exception of the Netherlands. However,there is a significant variety between countries like Spain with 0.53%, Italy with 0.41%,the UK with 0.4%, Belgium with 0.39%, France with 0.36% and Sweden with 0.35% andother countries like Denmark with 0.06%, Germany with 0.03% and Finland with 0.01%. Apotential cause could be the different stages the various countries are in whentransforming their retailing industry.In contrast the change in total working hours gives a mixed picture for the differentcountries: Italy with -0.61%, Germany with -0.35% and Sweden with -0.1% experienced amoderate decline in overall working hours. Only Spain with 2.13% and Denmark with1.37% experienced a significant increase in total working hours resulting in a significantcontribution to the growth of the retailing industry.Conclusion: TFP key driver of retail industry growth – ICT less importantThe results from this growth accounting exercise indicate that the key drivers to industrygrowth come from total factor productivity growth. In some countries it comes fromincreases in total working hours and labour quality changes. ICT-capital investmentsare not key drivers in the growth of real value added in European retailingindustries. The same applies to non-ICT capital investments. The stronger total factorproductivity growth and changes in labour quality composition are, the better is thecountries’ performance in retailing. Extending working hours, most possibly associatedwith longer opening times of shops, e.g. late hours during weekdays or longer openinghours during the weekend, may have played a role in this development wherederegulation might have helped to increase overall growth of gross value added.However, the EU KLEMS database does not offer sufficient data to analyse theseaspects in retailing on a solid empirical basis.4.2.3 ICT impact on labour productivity growthLabour productivity growthAccording to literature, the resurgence of productivity growth in the US economy did notlast beyond the year 2000 or is not directly related to actual ICT investments (Gordon2004; Jorgenson, Ho et al. 2007). Europe overall even did not show any acceleration inproductivity growth similar to that which happened in the US in the second half of the1990s (Inklaar, Mahony et al. 2003). Retailing has been identified as a key driving sector88