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Digitalization in Asian Economies

Paper Session

Friday, Jan. 3, 2025 8:00 AM - 10:00 AM (PST)

San Francisco Marriott Marquis
Hosted By: American Committee on Asian Economic Studies & American Economic Association
  • Chair: Reid W. Click, George Washington University

Digitalization and Material Well-Being at the Household Level

Abhishek Kumar
,
University of Southampton
Sushanta Mallick
,
Queen Mary University of London
Apra Sinha
,
University of Delhi

Abstract

Recent developments in FinTech have made financial inclusion a policy priority across the globe. Using aggregate data, we observe that quality-of-life indices that include financial inclusion strongly correlate with per-capita income across Indian states. In this context, using two rounds of household-level survey data from India spread over two decades, we explore the extent to which financial inclusion enables consumption smoothing, as consumption levels tend to correlate with both types of inclusion. Our results suggest that traditional financial inclusion is more effective compared to digital financial inclusion for consumption smoothing. This is because traditional inclusion leads to a larger reduction in borrowing costs compared to digital inclusion. Further, consumption smoothing due to financial inclusion depends upon wealth; at higher levels of wealth, consumption smoothing due to both types of inclusion is more pronounced. This is driven by an imperfection in financial markets where higher wealth acts as collateral and leads to a further reduction in the borrowing costs for these households.

Digital Entrepreneurial Ecosystem Advantage: Ecosystem Interactions and Digital Business Model Innovation

Erkko Autio
,
Imperial College Business School
Surat Chumjit
,
King Mongkut’s University of Technology Thonburi
Panida Kaensup
,
King Mongkut’s University of Technology Thonburi
Wanna Temsiripoj
,
King Mongkut’s University of Technology Thonburi
Selina Cao
,
University of Queensland

Abstract

We develop a theoretical model of digital entrepreneurial ecosystems as a novel type of cluster that facilitates digitally-enhanced business model innovation in new ventures. We argue that entrepreneurial ecosystems cultivate a shared experiential knowledge base of ‘what works’ in business model innovation. Consequently, the cluster advantage conferred to digital new ventures that reside in regional entrepreneurial ecosystems should be reflected in the digital innovativeness of their business models. Using primary survey data from two regional ecosystems in Thailand we show that, within digital entrepreneurial ecosystems, interactions among entrepreneurs drive knowledge spill-overs, which then fully mediate the effect of interactions on digital business model innovativeness. In other words, interactions among entrepreneurs act as a mechanism that translates cluster-level advantage into firm-level advantage.

Adoption of Digital Technologies, Business Model Innovation, and Firm Performance: Evidence from ASEAN Startups

Donghyun Park
,
Asian Development Bank
Yothin Jinjarak
,
Asian Development Bank
Willem Smit
,
Fulbright University Vietnam
Kun Fu
,
Loughborough University
Cynthia Petalcorin
,
Asian Development Bank

Abstract

Adopting digital technologies can accelerate business model innovation, both directly and indirectly by facilitating experimentation. We performed in-depth interviews of more than 600 startup entrepreneurs across six ASEAN economies, namely Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam, to develop a rich firm-level database. We then analyzed the data to asses the impact of digitalization on business model innovation and ultimately, financial and sustainability performance. Our empirical evidence confirms a positive relationship between digitalization and both types of firm performance. This lends some support to the notion that digitalization is good for both the bottom line and society.

Comparing Digital Entrepreneurship in China and the U.S: Alibaba vs. Amazon, Baidu vs. Google, and Tencent vs. Facebook

Keun Lee
,
Seoul National University
Joonyup Kim
,
Seoul National University

Abstract

The sustained rise and success of China’s digital platform firms, such as Baidu, Alibaba, and Tencent, is drawing much attention from academia and industry alike. However, one view exists that they grew owing to asymmetric protection by the Chinese government or they are just copying the business models of their American counterparts, such as Google, Amazon, and Facebook, respectively. Given this background, this paper investigates technological capabilities of these Chinese big tech companies, and to what extent and how they are catching up with their American counter parts. In other words, the paper makes comparative analyses of the three pairs of big tech firms, such as Baidu vs. Google, Alibaba vs. Amazon, and Tencent vs. Facebook, first in terms of the quantity and quality of their patents filed in a third country, namely EU.
Then, this paper explores the grand research question in the literature on technological catchup (Lee and Lim 2021), which is whether the Chinese latecomer, big tech, firms are creating new technological pathways or just following the pathways created by the forerunners in the US. This can be done by examining the pattern of citations, namely how much the Chinese firms cite their US counterparts. Additionally, it also addresses the question of how much the Chinese latecomers are citing scientific literatures than incumbents’ patents with a view to avoid IPR disputes, and whether or not the latecomers are specializing technologies with short cycle time where creative destruction happens more frequently and thereby dominance by incumbents are often disrupted (Lee 2013).

Discussant(s)
Meghana Ayyagari
,
George Washington University
Ann E. Harrison
,
University of California-Berkeley
Apra Sinha
,
University of Delhi
Aparna Anand
,
Columbia University
JEL Classifications
  • O3 - Innovation; Research and Development; Technological Change; Intellectual Property Rights
  • M2 - Business Economics