Research

Working Papers

• More than just Plug and Play: Early Evidence on Organisational Capital and AI Adoption

with Diane Coyle (Cambridge & ESCoE), Rebecca Riley (KCL & ESCoE) &  Zai Nguyen (Cambridge)

This paper provides early evidence that AI adoption by firms is linked to management practices in unique ways. Using panel data from the UK Management and Expectations Survey (MES), we find that firms with higher baseline management scores are significantly more likely to adopt AI. This relationship is specific to AI: the same management practices show no relationship with the adoption of other technologies such as robotics, specialized equipment, or specialized software. We also find that management capabilities related to performance measurement appear particularly important to AI adoption. These results suggest that organisational complementarities are specific to different technologies, with implications for shaping policies to encourage AI adoption by firms.

[Working Paper]

• What's the Value of Free? Reconciling Welfare Valuation with National Accounts

Studies that ask people how much they would need to be paid to give up free digital services imply valuations amounting to several percent of GDP, and on some calculations considerably more. Estimates applying the sum-of-cost approach place the figure below one percent. We argue that the gap reflects a difference in welfare concepts rather than one approach being better than the other. The former measures the welfare loss from service withdrawal, while the latter reflects the implicit income from a barter transaction in which households pay for digital services with their attention. Which measure is appropriate depends on the policy question. We argue that willingnessto-accept studies are better suited to questions involving the removal of established services from existing users, such as the impact of a cyber attack or the intentional withdrawal of a free service by a platform. For national accounting, we set out an approach that operationalises the barter framework while allowing households to value digital services above the cost of provision. Applying it to Facebook and Spotify in Europe for 2023, we estimate a combined value of $83.3 billion, or 0.43 percent of European GDP, of which $52.2 billion is not captured by advertising revenue.

[WorkingPaper]

• Measuring the value of free digital services

The goal of this study is to estimate and examine the value derived by households from the utilization of free digital services. For this exercise, we estimate value from the final consumption of three forms of free digital services: videoconferencing, personal email, and online news. As our measurement strategy, we employ the prices of "premium" or paid internet services as a proxy for the value of their free counterparts. We also use hedonic regression in order to extract the value of the 'free component' of these products and untangle them from the value of the premium-exclusive components. Our final estimates show that in 2020, the aggregate gross value derived by households from the consumption of the three digital services was between £7.0 billion and £25.4 billion, which is 0.57 to 2 percent of household final consumption expenditures (HFCE). We also observe that the value derived by households from consuming these products is growing much faster than HFCE. Our estimates show that in 2020, the initial year of the COVID pandemic, real household final consumption decline would have been 0.07 to 0.13  percentage points slower had the value of the three digital services been incorporated in the estimates.

[Discussion Paper]

[Conference Proceedings (World KLEMS)]

• Mind the Gap: Do Differences in Regulations Matter for Pollution Shifting? 

with Rolando Avendano (ADB) & Shawn Tan (IFC) 

This paper examines how differences in environmental regulation between investor and host countries influence the location of foreign direct investment (FDI), particularly in pollution-intensive industries. We used industry-level data from fDi Markets covering greenfield FDI from 2008 to 2018. We construct an index measure that captures both the stringency and enforcement of environmental policies using data indices form the Global Competitiveness Report of the World Economic Forum (WEF). We combine this with a measure of the regulatory "gap" between source and destination countries. Employing a Poisson pseudo-maximum likelihood (PPML) estimator, we find robust evidence that stricter environmental policies from host countries tend to deter FDI, particularly for carbon-intensive sectors. More importantly, our results suggest that stricter environmental regulations in investor countries may amplify the deterrent effect of host country regulations on investment into pollution-intensive sectors. These findings highlight the cross-border consequences of domestic environmental governance.

[Working Paper]

• Measuring the Value of Digital Piracy

The goal of this study is to measure the value derived by households from digital piracy. Our measurement strategy employs the price of paid digital services and services (e.g. Spotify, Netflix) as a proxy for the shadow price of their illegally acquired counterparts. This is a common method for the valuation of non-market activity and non-monetary transactions for national accounting purposes. To estimate the number of individuals engaged in digital piracy, we used information from the United Kingdom's Intellectual Property Office annual Piracy Tracker, which provides an estimate of the proportion of the UK population that engages in digital piracy. We find that, on average, the gross value from the piracy of music, video, live sports, software, computer games, and ebooks was between £3.6 billion and £7.5 billion in 2021. We also find that while the value from the final consumption of communication services has been consistently rising in the past five years, the inflation-adjusted gross value from the digital piracy of media has been falling. Our data shows that the growth in the value of final consumption from communication services would have been slower by 0.2 percentage points in 2021 had the value from the consumption of pirated content been accounted for in the estimates.

[Duscission Paper]

Read more of my research through the following sites:

• Google Scholar

• Researchgate