JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.The paper analyses the hypotheses that imports and inward foreign direct investment (FDI) have positive effects on the innovative activity of domestic firms because competition on the domestic market is thereby increased, and domestic firms have to perform more efficiently to maintain their market position. Chamberlain's random effects probit approach which may account for individual heterogeneity depending on exogenous variables is used to analyse a panel data set containing 1270 firms of the German manufacturing industry from 1984 to 1988. It turns out that both import share and FDI-share have positive and significant effects on product and process innovations.

Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp .pdf Non-Technical SummaryNumerous empirical studies at different levels of aggregation demonstrate the important role of information and communication technologies (ICT) for economic performance. As general purpose technologies ICT enable firms to reshape their business processes and to improve their products and services. Firms' innovation activity in turn increases labour productivity thereby entailing growth and competitiveness. Policy makers and industry representatives denote the availability of an efficient broadband Internet infrastructure to be essential in order to reap the potential benefits of ICT.This paper provides empirical evidence on the causal impact of broadband Internet on firm performance using a sample of German manufacturing and services firms. Firm performance is measured in terms of labour productivity and realised product and process innovation. The analysis refers to the early phase of DSL expansion in Germany from 2001 to 2003, when roughly 60 percent of the German firms already used broadband Internet. Identification relies on instrumental variable estimation taking advantage of information on the availability of DSL broadband at the postal code level. The results show that broadband Internet has no impact on firms' labour productivity whereas it exhibits a positive and significant impact on their innovation activity. Thus, firms that used broadband Internet in the early phase of DSL expansion where more likely to reshape their business processes and to bring new or improved products and services to the market. Das Wichtigste in Kürze

The paper shows that several estimators for the panel probit model suggested in the literature belong to a common class of GMM estimators. They are relatively easy to compute because they are based on conditional moment restrictions involving univariate moments of the binary dependent v ariable only. Applying nonparametric methods we discuss an estimator that is optimal in this class. A Monte Carlo study shows that a particular variant of this estimator has good small sample properties and that the e ciency loss compared to maximumlikelihood is small. An application to the product innovation decisions of German rms reveals the expected e ciency gains.KEY WORDS: panel probit model, GMM, conditional moment restrictions, k-nearest neighbor estimation.

Die Discussion Papers dienen einer möglichst schnellen Verbreitung von neueren Forschungsarbeiten des ZEW. Die Beiträge liegen in alleiniger Verantwortung der Autoren und stellen nicht notwendigerweise die Meinung des ZEW dar.Discussion Papers are intended to make results of ZEW research promptly available to other economists in order to encourage discussion and suggestions for revisions. The authors are solely responsible for the contents which do not necessarily represent the opinion of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp0205.pdf Non-technical SummaryThe fast technological development of the Internet as well as the declining prices for the use of this technology have led to an increased diffusion of the Internet during the last few years. One important application of Internet technology for firms is so-called Internet commerce or electronic commerce. Although broadly discussed in the media and glorified as the most promising medium for ordering, buying and selling products and services, e-commerce is in fact still at the beginning of a diffusion process whereas e-commerce between companies (business-to-business or B2B) currently has a broader scope than e-commerce between companies and consumers (business-to-consumers or B2C). Since B2B e-commerce can be regarded as a new technology (application) or a process innovation, this study attempts to evaluate several hypotheses proposed mainly in the literature on technology diffusion or adoption, but also in the innovation literature. The empirical analyses are based on a data set comprising 3,000 enterprises from the German manufacturing industry and the German services sector in the year 2000. We find positive and significant effects of firm size, the share of highly qualified employees and the export share. An IT-intensive production process, measured by the proportion of employees working predominantly at a PC, the share of ICT specialists as well as the use of Electronic Data Interchange, enhances the probability of a broad use of B2B e-commerce. An important influence on the use of B2B is the bandwagon effect, implying that firms are more likely to use this new Internet application if others within the same industry likewise do it. We find no significant effects of firm age and of the fact that a firm belongs to a group of companies as measures of a firm's flexibility and financial power. 1The Adoption of Business-to-Business E-Commerce: Empirical Evidence for German Companies January 2002Abstract Although in its infancy, one promising application of Internet technology for firms is so-called Internet commerce or electronic commerce. This paper analyses the determinants of B2B (business-to-business) adoption borrowing from the literature on the adoption of new technologies and considering factors like firm size, corporate status, human capital and international competitive situation. An ordered probit model is applied to a data set containing about 3,000 enterprises from the German manufacturing i...

Die Discussion Papers dienen einer möglichst schnellen Verbreitung von neueren Forschungsarbeiten des ZEW. Die Beiträge liegen in alleiniger Verantwortung der Autoren und stellen nicht notwendigerweise die Meinung des ZEW dar.Discussion Papers are intended to make results of ZEW research promptly available to other economists in order to encourage discussion and suggestions for revisions. The authors are solely responsible for the contents which do not necessarily represent the opinion of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp0132.pdf