ICT, Size of the Firm and Productivity

In this paper, using data from Uruguay, we identify the determinants of ICT use at firm level and we measure the impact of ICT on productivity. We extend previous literature including vertical network effects and the role of competition as determinants of ICT use. The main findings suggest that ICT has a positive, significant and large effect on firm’s productivity. This result is mainly driven by small firms. Moreover, vertical networking effects are important determinants of ICT use. The level of ICT used by the industry of the main input of the firm has a positive and significant effect on ICT used by the firm. Lastly, as in previous literature, horizontal networking and competition also matters for ICT use. Diego Aboal