ICT adoption in Irish manufacturing:
An example of merging two CSO
business microdata sets
Stefanie Haller
CSO Business Statistics Seminar, Dublin
26 February 2008
Research question
●
What drives the adoption and diffusion of
Information and Communication
Technology (ICT) at firm level?
Approach
• Important factors for technology adoption
• Firm characteristics
sectoral specialisation, firm size, internal organisation,
human capital
• Local industrial structure
spillover effects, competitive pressure, network
externalities
• Information from two data sets
• Census of Industrial Production (enterprise data)
• Survey on E-Commerce and ICT
Census of Industrial Production
• collected annually in its current form since 1991
• covers all enterprises/local units with 3 or more
employees in mining, manufacturing and utilities
• contains information on
turnover, employment (type), ownership, exports,
location, industry affiliation
• problems for use
• employment refers to one week in September
• imputed/estimated information
Survey on E-Commerce and ICT
• collected annually since 2003 (pilot 2002)
• covers 40-50% of enterprises in CIP (sample
re-drawn every year), broadly representative
• contains information on
internet usage, connection to internet, reasons for
using the internet, sales and purchases via the
internet, barriers to e-commerce
• problems for use
• data coding changed over time
• addition/elimination of options to multiplechoice questions
Final data set
Merge CIP with E-Commerce Survey
via unique plant identifier
Obtain
unbalanced panel of NACE sectors 15-36
– for period 2002-2004 for most indicators
– for period 2001-2004 for information relating to
monetary values
– exclude sectors 16 (tobacco) and 23 (refined
petroleum) for lack of variation and reasons of
confidentiality
Indicators of ICT adoption
Two discrete indicators:
1) Has the enterprise received online orders
2) Index of services offered online (0-5):
•
•
•
•
•
marketing the enterprise’s products
facilitating access to product catalogues and price lists
customised page for repeat clients
delivering digital products
providing after sales support
Two continuous indicators:
1) Share of employees using computers
2) Share of turnover due to online transactions
Discrete indicators of ICT adoption - Summary statistics
Firms % of firms
using
computers
% of firms offering x services online
0
1
2
3
4
5
Year
2001
2002
2003
2004
1,748
2,121
1,459
88.0
91.3
96.2
62.0
59.7
47.8
18.0
18.9
25.6
12.8
14.1
17.3
4.9
5.3
6.4
1.8
1.4
2.0
Ownership
domestic
foreign
4,475
853
90.1
99.4
60.7
38.4
19.3
26.4
13.5
20.4
4.5
10.5
Total
5,328
91.6
57.2 20.4 14.6
5.5
Firms % firms accepting/
having received
orders online
0.6
0.7
0.8
1,852
2,216
1,694
1,267
10.6
10.9
14.5
16.1
1.5
2.6
0.5
1.8
5,840
1,189
12.5
13.3
1.7
0.7
7,029
12.6
Continuous indicators of ICT adoption - Summary statistics
Firms
% of employees
% of turnover
using computers
due to online
(mean)
transactions (mean)
Year
2001
2002
2003
2004
1,801
2,149
1,650
1,235
32.5
33.6
36.7
1.23
1.19
1.87
2.13
Ownership
domestic
foreign
5,678
1,157
30.4
49.1
1.24
2.96
ICT classification
ICT-producing
ICT-using
non ICT
321
2,505
4,009
57.3
39.6
28.7
4.64
1.62
1.23
6,835
34.0
1.53
Total
Empirical Methodology
Yijrt    1 ln toijrt   2 ln wpeijrt   3mantechijrt   4clerical ijrt   5exintijrt
  6 multiijrt   7 ageijrt   j  r  t   ijrt
where
– lnto=log(turnover 1000€)
– lnwpe=log(wages per employee in 1000€)
– mantech: share of managerial & technical staff in employees
– clerical: share of clerical staff in employees
– exint: export intensity
– multi=1 if enterprise is part of multi-plant enterprise
• Probit regressions for discrete indicators of ICT adoption
• Fractional logit regressions for continuous indicators of ICT
adoption (Papke and Wooldridge, 1996)
ICT adoption: Probit regressions for discrete indicators
Dep. Variable
lnto
lnwpe
mantech
clerical
age
exint
multi
Dublin
border
midlands
west
mideast
midwest
southeast
southwest
2001
2002
2003
2004
constant
ICT producing
ICT using
non-ICT
Obs
Firms
no of services offered online
domestic firms
foreign firms
1.156 (0.000) *** 1.130 (0.000) ***
1.089 (0.332)
1.178 (0.424)
2.900 (0.000) *** 2.333 (0.021) **
3.470 (0.000) *** 3.288 (0.010) ***
0.996 (0.007) *** 0.995 (0.068) *
1.990 (0.000) *** 0.912 (0.530)
1.254 (0.077) *
0.865 (0.415)
omitted category
omitted category
0.824 (0.025) **
1.383 (0.076) *
0.785 (0.035) **
1.233 (0.393)
1.043 (0.648)
0.977 (0.904)
0.923 (0.379)
0.881 (0.535)
0.945 (0.583)
1.015 (0.944)
0.806 (0.011) **
1.135 (0.441)
0.888 (0.141)
0.867 (0.361)
0
omitted category
1.012 (0.699)
1.205 (0.000) ***
7.689 (0.000) ***
1.407 (0.026) **
1.343 (0.000) ***
omitted category
4385
2460
omitted category
1.043 (0.557)
1.210 (0.018) **
6.531 (0.003) ***
1.685 (0.000) ***
1.521 (0.000) ***
omitted category
832
446
firm accepts/has received orders online
domestic firms
foreign firms
0.990 (0.696)
1.039 (0.428)
1.113 (0.251)
0.559 (0.015) **
1.133 (0.580)
2.125 (0.056) *
2.484 (0.000) *** 1.356 (0.588)
1.003 (0.046) **
1.001 (0.799)
1.488 (0.000) *** 0.881 (0.499)
0.861 (0.358)
0.971 (0.913)
omitted category
omitted category
0.756 (0.008) *** 1.027 (0.913)
0.660 (0.001) *** 0.513 (0.028) **
1.021 (0.851)
0.524 (0.018) **
0.832 (0.095) *
0.764 (0.296)
0.773 (0.030) **
0.784 (0.296)
0.696 (0.000) *** 0.545 (0.022) **
0.723 (0.001) *** 0.773 (0.277)
omitted category
omitted category
1.069 (0.180)
0.923 (0.444)
1.247 (0.000) *** 1.039 (0.731)
1.280 (0.000) *** 1.143 (0.267)
0.184 (0.000) *** 1.586 (0.553)
0.997 (0.988)
1.171 (0.318)
1.156 (0.020) **
1.085 (0.625)
omitted category
omitted category
5678
2757
1108
474
ICT adoption: Fractional logit regressions for continuous indicators
Dep. Variable
lnto
lnwpe
mantech
clerical
age
exint
multi
ind-reg spillovers
ind spillovers
Dublin
border
midlands
west
mideast
midwest
southeast
southwest
ICT producing
ICT using
non-ICT
constant
year dummies
share of employees
share of turnover due to
using computers
online transactions
0.017 (0.020)
0.227 (0.084) ***
0.607 (0.086) ***
-0.391 (0.300)
2.200 (0.221) ***
0.375 (0.578)
2.591 (0.175) ***
-0.622 (0.539)
-0.003 (0.001) *
-0.005 (0.005)
0.324 (0.076) ***
0.722 (0.250) ***
0.042 (0.112)
-1.390 (0.468) ***
2.319 (0.225) ***
5.458 (0.365) ***
0.895 (0.238) ***
0.323 (0.745)
omitted category
omitted category
-0.347 (0.080) ***
-0.073 (0.304)
-0.306 (0.102) ***
-0.686 (0.383) *
0.007 (0.096)
-0.785 (0.329) **
-0.225 (0.088) **
-0.295 (0.320)
-0.151 (0.096)
-0.738 (0.302) **
-0.256 (0.081) ***
-0.495 (0.381)
-0.081 (0.078)
0.031 (0.409)
0.614 (0.122) ***
0.175 (0.310)
0.387 (0.051) ***
0.169 (0.241)
omitted category
omitted category
-6.350 (0.330) ***
-5.960 (0.664) ***
y
y
Summary and Conclusions
• Firms with more skilled employees, firms in ICTrelated industries, firms located in the Dublin area
more successful in ICT adoption
• Proximity to firms that have adopted ICT positively
associated with the share of employees using
computers and the share of turnover due to online
transactions
• Patterns of ICT adoption differ for domestic and
foreign-owned firms regarding size and export
intensity

Delays and differences in ICT adoption rates
Empirical Methodology - horizontal spillovers
• industry(j)-region(r) spillovers
a
Y jrt
Indreg jrt =
Y jrt
• industry spillovers
Y ajt − Y ajrt
Ind j r t =
Y jt − Y jrt
where Ya
= # of firms using computers if the dependent variable is
the share of employees using computers
= # of firms having received orders online if the dep. var.
is the share of turnover due to internet transactions
ICT adoption: Continuous indicators with interactions for foreign firms
Dep. Variable
share of employees
using computers
lnto
lnwpe
mantech
clerical
age
exint
multi
fo
fo_lnto
fo_lnwpe
fo_mantech
fo_clerical
fo_age
fo_exint
ind-reg spillovers
ind spillovers
constant
region dummies
time dummies
ICT class
-0,051
0,621
1,869
2,556
-0,001
0,279
0,020
-1,604
0,170
0,129
1,303
0,170
-0,006
-0,296
2,376
0,856
-5,903
y
y
y
Obs / Firms
LogL
(0.023) **
(0.089) ***
(0.257) ***
(0.187) ***
(0.001)
(0.097) ***
(0.122)
(0.848) *
(0.044) ***
(0.295)
(0.463) ***
(0.514)
(0.004) *
(0.195)
(0.226) ***
(0.234) ***
(0.336) ***
4.689
2.707
-2048,8
share of turnover due
to online transactions
0,105
-0,064
-0,254
-0,345
-0,003
0,693
-1,387
1,176
0,234
-1,182
1,405
-0,772
0,004
0,497
5,464
0,242
-5,968
y
y
y
(0.103)
(0.333)
(0.760)
(0.425)
(0.005)
(0.282) **
(0.479) ***
(2.908)
(0.151)
(1.053)
(1.425)
(1.897)
(0.011)
(0.610)
(0.377) ***
(0.757)
(0.704) ***
6.188
3.041
-343,9