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ICT Adoption and Heterogeneity in Production Technologies: Evidence for Chilean Retailers


  • We thank the National Statistical Office of Chile (INE) for providing access to the firm-level data. We thank the editor and two anonymous referees for valuable comments and suggestions. We also thank Bart Los, Iulia Siedschlag, Marcel Timmer, seminar participants at the University of Groningen and conference participants at the ParisTech conference on the economics of ICT, the 5th North American Productivity Workshop and the ZEW conference on the economics of ICT for helpful comments. Michael Koetter gratefully acknowledges the financial support from the Netherlands Organization for Scientific Research NWO. All remaining errors are our own.


The adoption of information and communication technology (ICT) can have far-reaching effects on the nature of production technologies. Because ICT adoption is incomplete, especially in developing countries, different groups of firms will have different production technologies. We estimate a latent class stochastic frontier model, which allows us to test for the existence of multiple production technologies across firms and consider the associated implications for efficiency measures. We use a unique data set of Chilean retailers, which includes detailed information on ICT adoption. We find three distinct production technologies. The probability of membership in a more productive group is positively related to ICT use.