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

e-Business in the Retail SectorResults for Hypotheses P.1-3:ICT-capital investments were no key drivers for growth of real value added inthe European retail industry between 1980 and 2004. Growth accounting suggeststhat the key drivers to value added growth in retailing came from total factorproductivity (TFP) growth, e.g. organisational changes.The intensity of investments in intermediate inputs was found to be the maincomponent of labour productivity growth. Investments in ICT capital as well asan increasing share of medium-skilled labour had a positive but small impact onlabour productivity growth.Considering literature findings, this outcome is not surprising. There may be significantdelays between the introduction of new technologies and related organisational changeson the one hand and impacts on productivity on the other. For example, an analysis forthe telecommunications industry (Erber 2005; Aral, Brynjolfsson et al. 2006) showed thatICT-impacts on total factor productivity growth happen at a later stage than when theinitial investments take place. The hypothesis that there is an instantaneous impact ofICT-capital investments on total factor productivity growth has to be refuted with regard tothe empirical analysis.With respect to the hypotheses formulated in section 4.2.1, the following conclusions canbe drawn: 52Exhibit 4.2-8: Results economic analysis ICT and value added growthHypothesesP.1 ICT-capital investment has become amain element in value added andproductivity growth in the retail industry,while other capital inputs summarised asnon-ICT-capital have diminished in theirrespective importance.P.2 TFP growth in the retail industry hasaccelerated together with increasedinvestment in ICT-capital.ResultNot confirmed. Growth accountingindicates that TFP changes played adominant role while ICT and non-ICTcapital inputs are less importantA production possibility frontieranalysis points at intermediate inputsas key drivers of labour productivitygrowth.=> ICT is a small driver, not the keydriver of growth in this sectorNot confirmed. There is noinstantaneous impact of ICTinvestment on TFP growth.(no)no!P.3 ICT and high- and medium-skilled labourhave a positive impact on labourproductivity growth.Weakly confirmed. ICT capital andmedium-skilled labour have a positiveimpact on labour productivity growth,but the impact is small. The impact ofhigh-skilled labour was found to beinsignificant in statistical terms.(yes)52For an overview of findings in other sectors see SeBW Report No. 10/2008 “an EconomicAssessment of ICT Adoption and its Impact on Innovation and Performance”, section 2.4,Exhibit 2.4.1.95