Information And Communication Technology Investment Research Articles

Does ICT Investment Affect Market Share and Customer Acquisition Cost? A Comparative Analysis of Domestic and Foreign Banks Operating in India

Competitive banks aggressively invest in information and communication technologies (ICT) to enhance their market share and reduce Customer Acquisition Costs (CAC). This study examines the impact of cumulative stock of ICT investment on (a) deposit and loan market share and (b) CAC of banks operating in India. The analysis uses a longitudinal dataset of 84 domestic and 70 foreign banks from 2000 to 2020, employing a two-step system Generalized Method of Moment (GMM). It is found that ICT investment adversely affects the market share of domestic banks, indicating a need for these banks to strategically invest more in CAC. Conversely, foreign banks are able to increase their market share through ICT investment and reduced CAC, thereby demonstrating greater efficiency in utilizing ICT. The study underscores the strategic importance of cumulative stock of ICT investment for banks. Nonetheless, it is emphasized that ICT investment must be complemented with innovative marketing strategies to enhance customer experience, reduce CAC, and increase market share. Overall, while foreign banks are able to leverage ICT to boost efficiency, domestic banks must leverage ICT to implement targeted marketing strategies and strive to enhance their customer service.

Re-examining the effects of information and communication technology on economic growth

Information and Communication Technology (ICT) has transformed the way people communicate, interact, and use information for growth. This study uses a three-year panel of 91 countries to examine how mobile phones as ICT affect economic growth directly through the communication and information channel, and indirectly through the FinTech and financial inclusion channel. We derive these effects of mobile phones using the Structural Equation Modeling approach, controlling for time-invariant heterogeneity at the country level. The results are then compared with the estimates using the commonly adopted stepwise fixed-effects regressions. The results indicate that the direct effect of mobile phones is more pronounced than the indirect effect. Although mobile phones promote FinTech applications for payments and savings, expanded mobile phone coverage is negatively associated with financial inclusion in terms of formal credit. In contrast to the majority of empirical evidence showing limited impacts on developing Sub-Saharan Africa, we consistently document greater impacts on this region, suggesting greater benefits to be achieved from ICT investments. Our results remain robust across different measurements of financial inclusion and estimation methods.

Information technology investment and rural bank performance in Ghana: the moderating role of ICT diffusion and financial development

PurposeThis study sought to examine the interaction between rural bank performance, information and communication technology (ICT) investment, ICT diffusion and financial development.Design/methodology/approachData were sourced from the Association of Rural Banks (ARB) Apex and World Development Indicators (WDI) for the period 2014–2020. A total of 122 rural banks were used for this study. The study adopted the two-step system generalized method of moments (SGMM) estimation technique in assessing the interactions among variables.FindingsThis study found compelling evidence to support the positive effect of ICT investment on banks’ performance (return on asset and net interest margin). Further, ICT diffusion and financial development positively influence banks’ performance. The results show a positive moderating effect exerted by ICT diffusion and financial development on the impact of bank risk (bank stability) and ICT investment on all three performance measures.Originality/valueThe study focuses on the rural banking sector in the Ghanaian economy, compared to related studies that examine the subject matter for commercial banks. The moderating effects of ICT diffusion and financial development are assessed to guide policy on rural banking development in Ghana.

Emerging ICT clusters in the Western Balkans: A convergence model based on financial statement analysis

The Western Balkans is experiencing an ongoing inflow of foreign direct investments (FDI) in the information and communications technology (ICT) industry as several European enterprises have already established their presence in the region. These inflows have generated large-scale ICT investments in the region, creating new knowledge-based clusters and technology spillovers in regional economies. On the basis of financial statement indicators collected for 327 European and regional ICT enterprises and on panel data estimation, this paper tries to estimate technology transfer in the Western Balkan region. Specifically, the proposed model examines cluster spillover effects in improving the absorptive capacity of the Western Balkan region in creating a pool of specialized local suppliers and a talented regional labor force. Model estimation results indicate that limited spillover effects have occurred from the newly created clusters of European ICT enterprises in the regional economy of the Western Balkan region. Spillovers related to improved technical capabilities, increased labor productivity, higher resource efficiency, and flexible operational structures require further stimulation to speed up convergence and integration of the local ICT industry in the corresponding European value chain. Finally, this paper concludes that competitive advantages such as a cheap labor force are no longer feasible for sustainable development. To narrow down the existing know-how gap, particular efforts are required regarding policies focused on educating human capital and transforming regional enterprises to successfully compete in the European market.

Measuring the impact of information and communication technology investment on the profitability of Indian manufacturing MSME

PurposeThis study aims to investigate the impact of information and communication technology (ICT) investment on the micro, small and medium enterprises (MSME) profitability in the Indian context.Design/methodology/approachThis study used a framework based on the ICT investment and firm size, measuring the impact on profit before depreciation, interest, tax and amortisation of MSME by taking a random sampling of 300 Indian MSME manufacturing firm’s secondary data from the Prowess database. This framework was analysed using the design of experiment (DoE) technique.FindingsThe study showed that ICT investment has a significant positive relationship with profitability. This study examines the different ICT investment levels to predict investment strategies and fine-tune profit targets. The critical finding is that ICT investment maximises profit at one million rupees. This discovery aids MSME leaders’ sustainable business decision-making.Research limitations/implicationsThis study has an explicit limit to the Indian context, where the firm requirements of countries are different, and these findings need to be validated with many operating variables and applied to more firms with more data. Even so, as a theoretical implication, this study took a novel approach to ICT adoption (through ICT investment) in the Indian MSME sector with guiding levels of ICT investment for each type of firm (i.e. micro, small and medium). This study opens new avenues for investigating researchers and stakeholders by exploring other factors responsible for ICT adoption.Practical implicationsThis study uniquely provides practitioners with the functional level of ICT investment for MSMEs in the Indian context. These finding guides top management to make strategic ICT adoption decisions with information symmetry. At the same time, these findings suggest financial institutions astern their credit programme to provide credit for ICT investment in MSMEs.Social implicationsThis study highlights the value of ICT as a practical resource for business owners that significantly makes MSMEs more informed and profitable, thus creating more jobs and incrementing the country’s gross domestic product (GDP).Originality/valueThis study offers unique empirical findings on how decision makers in MSMEs maximise profits through optimal ICT investment levels depending upon the firm size in an emerging economy like India. There is evidence in the study to conclude that ICT is a need of MSME and has implications for firm performance.

ICT development and total factor productivity growth

Total factor productivity (TFP) is essential for disentangling the determinants of economic growth, productivity, and the standard of living. Understanding the variations in TFP, however, is greatly challenging because of the many assumptions that comprise the theoretical growth framework. In this paper, we aim to explore the determinants of TFP growth for countries at different stages of information and communication technology (ICT) development. To address the endogenous nature of the associated growth variables, we implement a three-stage-least (3SLS) square panel regression to improve the efficiency and asymptomatic accuracy of the estimators. We find that transmission channels, such as financial openness and trade globalization, have contributed substantially to growth in both advanced and developing countries. However, we also discover that greater financial openness can undermine a country’s TFP growth if the financial system is not sufficiently developed. When time horizons are decomposed into pre-ICT development and post-ICT development periods, a significant crowding-out effect is observed between ICT investment and financial openness in the pre-period, implying that the allocation of resources is critical for countries in the developing stage. Trade and finance policies that are adopted by advanced and developed countries might not be ideal for underdeveloped countries. Discretion in choosing adequate policies regarding financial integration and trade liberalization is advised for these emerging countries.

Economic growth and the proliferation of ICT infrastructures: which causes the other?

This study explored the causal association between Information and Communications Technology (ICT) infrastructure development, measured by an ICT index, and the economic growth of 42 African economies between 2000 and 2019. Whether ICT development has contributed to real per capita GDP growth or ICT infrastructure expansion has just been a consequence of growth in real per capita GDP has been overlooked in prior studies concerning Africa. The econometric techniques used to analyse the data included robust second-generation tools to investigate cross-sectional dependence, slope homogeneity, and panel causality. The findings detected significant independence between the variables across countries, the slope was heterogeneous, and there was a long-run association between all of the economies in the sample. Dumitrescu and Hurlin’s panel causality analysis indicated a unidirectional causal association between per capita income and the ICT index. The results also demonstrated that capital and employment were the leading causes of per capita GDP growth. The findings suggested that accelerating economic growth in developing economies was essential to promoting ICT investment.

Impact of Information and Communication Technology (ICT) On The Economy of Jigawa State

In recent years, progress in information and communication technology (ICT) has caused many structural changes such as reorganization of economy, globalization, and trade extension, which leads to capital flows and enhancing information availability. Moreover, ICT plays a significant role in development of each economic sector, especially during liberalization process. Growth economists predict that economic growth is driven by investments in ICT. Information and Communication Technology (ICT) such as the world-wide application of mobile phones and internet etc. have contributed substantially to the fast-growing world economy in unprecedented ways. The objectives of this study was to identify and determine the role that ICT played/playing in improving the economic growth and development of Jigawa state, also factors limiting the use of ICT in most of the key areas that support economy are identified. A questionnaire survey was administered manually to 184 sampled respondents. Descriptive statistic were used in analyzing the data and testing of hypothesis among different classes of the respondents. The result showed that everyday more people are getting involved in using ICT technology, these tells that ICT brings positive change in diversifying the Jigawa state economy. The implications of these results are that most people of Jigawa state are doing farming as their occupation and have a disperse settlement, because of these, they requires maximum support from either government or private organizations to provide them with ICT facilities, orient the people on the use of ICT and the possible ways to use it for self-entrepreneurship program in order to boost the economy.

The Influence of Information and Communication Technology (ICT) on Corporate Performance: a Case of National Social Security Fund (NSSF)

Nowadays, information and communication technology is becoming important for organisations to run their business competitively. ICT is considered capable of producing the best performance of the organisations. With the development of the organisations's performance, it will create renewal of resources that can compete in uncertain market conditions. This study investigated the impact of ICT on corporate performance. It also examined the mediating role of human capital in the relationship between ICT and corporate performance of the National Social Security Fund (NSSF). The research model was developed through the literature review.Data were collected through a questionnaire from 194 NSSF staff selected using probability sampling with the purpose sampling method as well as non-probabilistic sampling by appropriate methods. Various statistical analyses, including cross-tabulation and regression analysis, were used to determine the impact of ICT on business performance. The results show that ICT has a positive impact on corporate performance through human capital capability as a mediating variable. The use of ICT (Internet, mobile devices, computer hardware and software, and data management systems) has a positive impact on the achievement of the NSSF's objectives; financial performance, accountability, service delivery and operational efficiency. This project results encourages the managers and employees of organizations to use the organizational resources available to implement ICT investments in organizations and improve human capital skills, which are the most valuable assets of any organization to remain competitive in the markets.

A Sustainable Development Assessment for the Load Capacity Factor and Carbon Footprint in India: The Role of Information and Communication Technologies, Renewable Energy, and Structural Changes

The increase in India’s carbon emissions and the decline in its environmental quality are a threat to the realization of the global sustainable development goals (SDGs). Minimizing the negative environmental impacts from fossil fuels through analysis of the determinants of India’s ecological quality is an important research topic. The objective of this study is to examine the impact of information and communication technologies (ICT), renewable energy, and structural changes on environmental quality in India. In this context, the study uses the novel Fourier quantile causality test for the period 1995m1-2021m12. The results of the study show that structural changes have no impact on carbon footprint and load capacity factor, while renewable energy and ICT contribute to the improvement of environmental quality. Based on the findings of the study, the Indian government is recommended to rise investment in ICT and renewable energy to pursue a growth strategy in line with the SDGs.

Does ICT development influence renewable energy investment? Evidence from top-polluted economies

Investing in renewable energy sources is one of the best solutions to deal with climate change and global warming. Information and communication technology (ICT) has played a critical role in making a more sustainable economy. However, whether ICT influences renewable energy investment is a matter of concern for most empirics. Employing the CS-ARDL model, this study covers the period from 1998 to 2021 and aims to explore the connection between ICT and renewable energy investment in top-polluted economies, encompassing Asian, American, African, and European regions. The findings of the CS-ARDL model confirm that ICT increases investments in renewable energy in the long run in all regions. Moreover, GHG emissions, GDP, and financial development also cause renewable energy investment to rise in top polluted economies. In the short run, most of the estimated coefficients are insignificant in almost all samples. These results imply that policymakers should try integrating ICT into the renewable energy industry to make it more accessible to as many people as possible to promote greener practices in top polluted economies.

On real estate market transparency: The relationship with ICT trade and investment

The relationship between information and communication technology (ICT) investment, ICT trade, and real estate market transparency is examined in this paper. National-level bi-annual data from a sample of advanced and emerging market economies for the period 2004–2018 underpins this work. The regression analyses suggest greater levels of capital investment in ICT and ICT trade are associated with increased transparency in the real estate market. The effect is more pronounced in emerging economies than in advanced ones. Real estate market transparency is also higher in contexts having less restrictions on foreign real estate investment, coupled with corruption controls. These findings also align with existing literature inferring that countries with common law traditions are often more transparent than those from civil law origins.

Artificial Intelligence, Robotics and Information, and Communication Technology (ICT) as Tools for Business and Education Management

Intuitively, artificial intelligence, robotics, and information and communication technologies are important because they give enterprises and institutions insights into their operations that they may not have been aware of previously and because, in some cases, they perform tasks better than humans. As tools for business and education management, artificial intelligence, robotics, and information and communication technologies in the 21st century are Business and education systems have been described as vital to keeping abreast with rapidly changing technologies. Its importance has been translated into huge potential in terms of positive outcomes, although investments in ICT in Nigeria’s business and education systems have not yielded much when compared to similar investments made in communication. This paper briefly discussed the roles of artificial intelligence, robotics, and information and communication technologies as tools for business and educational management. At the end of the paper, suggestions were made for how to use artificial intelligence, robotics, and information and communication technologies in business and education management in the best way possible.

Impacts of Mobile Phone Subscription, Internet Users, and Broadband Adoption on National Output in South Korea

Applying the macroeconomic model developed by Romer (2000), this paper finds that more mobile phone subscriptions, Internet users, and broadband adoption raise output (real GDP) in South Korea. In addition, fiscal expansion and a higher expected inflation rate reduce output whereas real appreciation of the Korean won increases output. Therefore, governments should support investments in ICT (information and communication technologies) in order to enhance output.

Job creation and destruction in the digital age: Assessing heterogeneous effects across European Union countries

Do investments in Information and Communication Technology (ICT) create jobs? The literature suggests that, even if innovations are labour saving, there may be compensating mechanisms that lead to a positive employment effect. We investigate this issue using country-level data for the European Union from 1995 to 2019. The results suggest an average positive net effect of ICT investment on total employment. An increase of €100,000 in the ICT investment stock is associated with an average increase of 3.3 jobs in the European Union. However, the magnitude of the impact is heterogeneous across countries. The differences are explained by the country-specific characteristics of ICT investment (non-machine versus machine-based) and the existing skill endowment of the labour force. Moreover, the rate of return on investment expressed in terms of net job creation tends to decline over time, as the share of high-skilled workers in the market increases.

Exploring the relationship between information and communication technology (ICT) and productivity: Evidence from Australian farms

AbstractThe relationship between information and communication technology (ICT) and farm productivity remains unresolved and often debated with limited evidence. While ICT is generally accepted by many to be a positive driver of productivity, others question it. Realistically, truth is likely somewhere in between. Certain ICT investments are likely to facilitate productivity improvement, whereas others may offer some other benefits such as improved safety or reduced emissions. It is also undeniable that some ICT investments may fail or offer little more than a temporary novelty. Using a sample of Australian farm‐level data, analysis in this paper finds a positive relationship between ICT investment and productivity. Specifically, the use of precision agriculture and machinery infused with ICT (such as GPS autosteering tractors) is found to be statistically significant. Moreover, digital internet access or access to the National Broadband Network (NBN) is found to be beneficial—and conversely, farms that reported mobile and internet connectivity problems tended to achieve lower productivity.

Exploring application portfolio management in Indonesia: a case study of the Indonesia agency for the assessment and application of technology

Due to rapid information and communication technology (ICT) growth, government agencies must manage more digital apps to support public service operations and administration. In Indonesia, at least 400,000 applications have been received by various ministries and government agencies. This amount will hurt the ICT budget’s investment and waste if no approach is employed. Problems can be solved with application portfolio management (APM). Indonesian government agencies’ AMP implementation is unclear. APM is applied at the government research institute agency for the assessment and application of technology (BPPT) in this study. BPPT was chosen due to APM’s lack of ICT investment management. This research examined 41 submissions from the 2019 digital transformation initiative. APM selected two mapping models. The outcome indicates how APM may offer ICT strategies for current applications to government entities. This analysis mapped existing applications into two models: McFarlan’s strategic grid and gartner’s TIME model. Mapping findings from these two models-technical health evaluations and regulatory compliance-may be used for application sustainability suggestions. 11 treatments were advised for maintenance and investment, while 4 applications were recommended for removal. This research helps us understand how the Indonesian government institute maintains its application portfolio and how APM might be a valuable method for application management.

Exploring application portfolio management in Indonesia: a case study of the Indonesia agency for the assessment and application of technology

Due to rapid information and communication technology (ICT) growth, government agencies must manage more digital apps to support public service operations and administration. In Indonesia, at least 400,000 applications have been received by various ministries and government agencies. This amount will hurt the ICT budget’s investment and waste if no approach is employed. Problems can be solved with application portfolio management (APM). Indonesian government agencies’ AMP implementation is unclear. APM is applied at the government research institute agency for the assessment and application of technology (BPPT) in this study. BPPT was chosen due to APM’s lack of ICT investment management. This research examined 41 submissions from the 2019 digital transformation initiative. APM selected two mapping models. The outcome indicates how APM may offer ICT strategies for current applications to government entities. This analysis mapped existing applications into two models: McFarlan’s strategic grid and gartner’s TIME model. Mapping findings from these two models-technical health evaluations and regulatory compliance-may be used for application sustainability suggestions. 11 treatments were advised for maintenance and investment, while 4 applications were recommended for removal. This research helps us understand how the Indonesian government institute maintains its application portfolio and how APM might be a valuable method for application management.

THE IMPACT OF ICT CAPITAL GROWTH ON ECONOMIC GROWTH: THE CASE OF EGYPT

Capital investments in information and communication technology (ICT) have been a major contributor to the growth of several developed countries. In an attempt to boost their economies, some emerging and developing countries have been following a similar path, in which they heavily invest in the sector of ICT. However, due to other factors, ICT capital growth may not always produce the desired economic outcome. The purpose of this study is to estimate the impact of capital growth in ICT on economic growth in one developing country, Egypt, which has been heavily investing in the sector of ICT. The study analyses time series data covering the period from 1999 to 2019 using an error correction model. The findings demonstrate that there is no long-term positive association between ICT capital growth and economic growth in Egypt. While the development of ICT provides the potential for Egypt to achieve sustained economic growth, the significance and size of these impacts are currently negligible. The study concludes that in order to benefit from capital investments in ICT, policymakers should enact high-quality investment policies and improve the overall quality of the surrounding environment, such as the regulatory and institutional environments, in addition to controlling inflation and government consumption

The impact of ESG on the bank valuation: evidence of moderation by ICT

PurposeThe banking sector is undergoing a phase of transition worldwide. The degrees of flux may vary from country to country. Metamorphosis causes include financial distress, corporate governance issues, environmental and social issues and an avalanche of technological advancements. This study aims to explore how environmental, social and governance (ESG), one of the essential and contemporary change agents across the sectors, including in the banks, impacts the valuation of the banking sector. In addition, this study also aims at how another vital and inevitable change agent, information and communications technology (ICT) expenses, influence the ESG’s impact on bank valuation.Design/methodology/approachPanel data regression is conducted using valuation (Tobin’s Q and market capitalization) as endogenous variables, and ESG and expenditure on ICT are used as the main exogenous variables. The interaction term of ESG and ICT is also used as an exogenous variable.FindingsSurprisingly, the authors find unequivocal evidence of the positive influence of ESG and ICT on bank valuation without consideration of ICT. In addition, ICT is also found to moderate the ESG’s influence on bank valuation positively. In particular, when ICT is low, an increase in ESG impacts the valuation negatively. However, high values of ICT cause ESG to impact the valuation positively.Research limitations/implicationsWithout consideration of ICT, ESG investments coincide with the value-creating hypothesis. However, modern world firms do not have a choice of ignoring ICT, which is essential to sustain. Adequate investments in ICT shift the value-eroding ESG effects (at low ICT) toward a value-creating hypothesis (at high ICT) when ESG investments start to impact the value positively.Practical implicationsIn practice, modern-day firms have no choice but to align with ESG investments. In cases where ESG tends to erode value (at low ICT), the firms should, in parallel, choose to make some ICT investments. Such combined and balanced attention to ICT, along with ESG, will undoubtedly benefit the firms financially.Originality/valueThe study’s significant implications are on the stakeholders’ mindsets, who may not have clarity on the role of ESG and ICT in the bank’s performance and subsequent valuation. The policymakers may also restructure their long-term policy on ESG in the banking sector using the current study’s findings.