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Investigating the total factor productivity changes in the top ICT companies worldwide

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Abstract

This study benchmarks the cross-layer productivity of information and communications technologies (ICT) for the period between 1996 and 2015. Our results display that layer 3 companies (platforms, e-commerce, content and software) are the drivers of productivity growth within the ICT industry in the recent years. In contrast, layer 2 companies (network operators) score lower in efficiency than the other layers and experience a continuous decline in average productivity since mid-2000s. We note that, the key financial performance indicators signal a slowdown in the ICT industry since 2011, after when average increase rates of revenues and total assets dropped significantly. The stagnation is severer for network operators, which have been the main investors of the networks on which ICT rises.

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Notes

  1. Convergence process in ICT have changed the boundaries and competition in the industry. Today the ICT companies need to compete with others that are once considered to be in distinct segments of the industry. For example, besides its conventional business line, online bookstore Amazon.com started to sell cloud computing infrastructure or the legendary software giant Microsoft started to produce mobile phones after its acquisition of Nokia’s devices and services business.

  2. Provides a conceptual framework to understand the structure of the converged ICT, Fransman’s model horizontally aggregates the ICT industry into four permeable layers where layer 1 is the networked elements which builds the physical infrastructure of the information network (e.g. Apple, Cisco, HP, Samsung etc.). Layer 2 is the network operators which provides services to access the information network (e.g. AT&T, Deutsche Telekom, Vodafone etc.). Layer 3 is the platforms, e-commerce, content and software where information and content is generated and shared within the network (Google, Microsoft, Amazon, Reuters, Timer Warner, and Walt Disney etc.). Layer 4 is the consumers of the digital content and information.

  3. Periods are 1996–1999 (P1), 2000–2003 (P2), 2004–2007 (P3), 2008–2011 (P4) and 2012–2015 (P5).

  4. Worldwide ICT spending in 2015 is $3413 billion. (Source: http://www.gartner.com. Accessed on 01.01.2017).

  5. Source: http://data.worldbank.org. Accessed on 15.07.2016.

  6. Computations were done according to Färe et al. [16] and Tulkens and Vanden Eeckaut [36] for contemporaneous and sequential Malmquist indices respectively.

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Acknowledgements

Authors appreciate and thank the Editor and the reviewers. Their valuable suggestions helped this paper to be more comprehensive.

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Authors and Affiliations

  1. Department of Management, Faculty of Political Sciences, Ankara University, 06590, Ankara, Turkey

    Fazıl Gökgöz & Mustafa Taylan Güvercin

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  1. Fazıl Gökgöz
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Correspondence to Fazıl Gökgöz.

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Gökgöz, F., Güvercin, M.T. Investigating the total factor productivity changes in the top ICT companies worldwide. Electron Commer Res 18, 791–811 (2018). https://doi.org/10.1007/s10660-017-9285-4

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