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Firm organization and the adoption of information and communication technologies

Project description

The effect of information and communication technologies on firms

Information and communication technologies (ICT) have reshaped the economy, transforming production and the nature of employment. However, how ICT adoption impacts firms and employees is only partially understood, making it difficult to anticipate the effects of future technological progress. Funded by the European Research Council, the ORGANDICT project will enhance our understanding of the relationships between ICT, firm organisation, innovation, growth, and the future of work. The project will assemble novel data sets with comprehensive information on ICT, firm organisation, global value chains, and the characteristics, tasks and wages of employees. Through rigorous empirical analysis, the project will identify the causal effects of and elucidate the economic mechanisms behind ICT adoption, providing valuable insights for both academia and industry.

Objective

The objective of my proposal is to push the frontier of our understanding of how the adoption of information and communication technologies (ICT) affects the internal organization of firms and thus firm productivity, employees’ careers and wages; how ICT adoption affects the organization of firms’ global value chains (GVC) and thus domestic employee outcomes; and how ICT adoption affects the foreign sourcing of innovation and thus domestic innovation.

Existing research gives only partial answers to these questions as it provides limited insights into the economic mechanisms behind the effects of ICT adoption and the organization of GVC. Research is impeded by lack of data with exhaustive information on ICT, GVC, and firm and employee outcomes.

My proposal will change that. I will assemble novel, comprehensive data sets with specific information on firms’ ICT use, GVC, balance sheets, and patents, as well as all employees’ characteristics, tasks, and wages. I will break new ground by developing theory and conducting theory-based empirical analyses that both identify causal effects and shed light on the economic mechanisms behind them.

My proposal consists of three parts. Part 1 exploits unique features of my data to study how ICT adoption induces firms to reorganize employees. I will analyse changes to task complexity and autonomy, careers and wages within employees over time to explore complementarities between higher availability of information due to ICT and employee knowledge.

Part 2 quantifies the effect of ICT adoption on offshoring, and, for the first time, studies how ICT adoption and offshoring jointly affect the task complexity and autonomy, careers and wages of employees, testing the predictions of task-based models.

Part 3 evaluates the effect of ICT adoption on offshoring of research and development (R&D), a key determinant of growth, and derives and tests novel conditions under which foreign R&D complements or substitutes domestic innovation.

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Keywords

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Programme(s)

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Topic(s)

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Funding Scheme

Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.

HORIZON-ERC - HORIZON ERC Grants

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Call for proposal

Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.

(opens in new window) ERC-2022-STG

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Host institution

EBERHARD KARLS UNIVERSITAET TUEBINGEN
Net EU contribution

Net EU financial contribution. The sum of money that the participant receives, deducted by the EU contribution to its linked third party. It considers the distribution of the EU financial contribution between direct beneficiaries of the project and other types of participants, like third-party participants.

€ 1 379 648,00
Address
GESCHWISTER-SCHOLL-PLATZ
72074 Tuebingen
Germany

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Region
Baden-Württemberg Tübingen Tübingen, Landkreis
Activity type
Higher or Secondary Education Establishments
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Total cost

The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.

€ 1 379 648,00

Beneficiaries (2)

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