Telecommunications Policy 40 (2016) 291–306

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Telecommunications Policy
URL: www.elsevier.com/locate/telpol

Cloud adaptiveness within industry sectors – Measurement
and observations
Katharina Candel Haug a, Tobias Kretschmer b,n, Thomas Strobel a
a
Ifo Institute, Poschingerstr. 5, 81679 Munich, Germany
b
ISTO and ORG, LMU Munich, Kaulbachstr. 45/II, 80539 Munich, Germany

a r t i c l e i n f o abstract

Available online 14 September 2015 Cloud computing combines established computing technologies and outsourcing advan-
Keywords: tages into a new ICT paradigm that is generally expected to foster productivity and
Cloud computing economic growth. However, despite a series of studies on the drivers of cloud adoption,
Information and communication evidence of its economic effects is lacking, possibly because many of the datasets on cloud
technologies computing are of insufficient size and often lack a time dimension as well as precise
Technology diffusion definitions of cloud computing, thus making them unsuitable for rigorous quantitative
Firm organization analysis. To overcome these limitations, we propose a proxy variable for cloud computing
Productivity usage—cloud adaptiveness—based on survey panel data from European firms. Observations
based on a descriptive analysis suggest three important aspects for further research. First,
cloud studies should be conducted at the industry level as cloud computing adaptiveness
differs widely across industry sectors. Second, it is important to know what firms do with
cloud computing to understand the economic mechanisms and effects triggered by this
innovation. And third, cloud adaptiveness is potentially correlated to a firm’s position in
the supply chain and thus the type of output it produces as well as the market in which it
operates. Our indicator can be employed to further analyze the effects of cloud computing
in the context of firm heterogeneity.
& 2015 The Authors. Published by Elsevier Ltd. This is an open access article under the CC
BY license (http://creativecommons.org/licenses/by/4.0/).

1. Introduction

Although mention of “the Cloud,” or cloud computing, is now ubiquitous in daily life, our understanding of what it
actually is and how it changes private and corporate structures is surprisingly limited. Most people recognize cloud
computing as a fairly recent development in information and communication technology (ICT). However, the wide range of
opinions of what constitutes cloud computing and how it affects households and enterprises is a partial reflection of the
many different uses of cloud computing and the resulting lack of a universally accepted and understood definition of it.
Beginning several decades ago, advances in processor and related technologies and the spread of the personal computer,
as well as server structures and communication infrastructure like the Internet, helped automatize production and supply
chains and facilitate management and administration. ICT as a whole was expected to have a great influence on the
productivity of industries and economies. Indeed, as suggested by Cardona, Kretschmer, and Strobel (2013), ICT has some of
the hallmarks of enabling or general purpose technologies that are widely adopted and induce further innovations.

n
Corresponding author. Tel.: þ49 89 2180 6270.
E-mail addresses: candelhaug@ifo.de (K. Candel Haug), t.kretschmer@lmu.de (T. Kretschmer), strobel@ifo.de (T. Strobel).

http://dx.doi.org/10.1016/j.telpol.2015.08.003
0308-5961/& 2015 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY license
(http://creativecommons.org/licenses/by/4.0/).

data on this phenomenon continue to be scarce. or both? 3. Brynjolfsson. However. Hence. compile existing first steps toward a theory of cloud computing economics and review the empirical literature on the topic. 2014). major structural changes and productivity-enhancing effects are expected from the usage and diffusion of cloud computing. Market research estimated the global private and corporate cloud computing market to have reached $56. & Hitt.6 billion (on public cloud services only) in 2014 and it is projected to more than double that by 2018 (IDC. The history of computing and IT begins in the late 1950s with the arrival of the first mainframe computers. in our sample. hardware advances favored decentralization. Erik. This was the first step toward a network of computers. Section 5 presents six observations from descriptive analyses of this dataset. Applying our indicator to the data. 1996. which has spurred investment in IT and communication equipment (Jorgenson. Similar empirical evidence is given by Brynjolfsson and Hitt (1995. We first outline the concept and market of cloud computing (Section 2). the commercial world is characterized by a trend toward sharing. Mainframes had high upfront costs for hardware and software and were therefore optimized for efficiency. were . crowdsourcing. We utilize the widely used Harte Hanks technology database for 13 European countries and the years 2000 through 2007 to develop our cloud indicator and then merge this technology data with balance sheet information from the ORBIS database. However. This is of particular importance as many extant surveys do not employ a precisely defined or even generally accepted measure and longitudinal studies are yet to be conducted. Interestingly. / Telecommunications Policy 40 (2016) 291–306 Various authors identify positive productivity effects from ICT utilization (Brynjolfsson & Hitt. 2007).292 K. information technology sharing has a long tradition. Section 6 concludes. for example. 2010). Pallis. introducing capacity sharing across organizations. Personal computers. 1990) that was the result of isolated innovative processes and extended data transmission possibilities. These were mostly found in universities and governmental organizations. we make six observations on firm-level cloud computing regarding possible correlates of adoption and the correlation between firm productivity and cloud computing in the context of structural differences in industry sectors. Eurostat (Giannakouris & Smihily. As ICT became more widely used. services exhibit especially high adoption rates. 2010). Candel Haug et al. Jorgenson (2005) finds that despite productivity growth rates being by far the highest in ICT- producing industries. From shared infrastructure to cloud These days. 2014) reports that 19% of EU enterprises used cloud computing in 2014. As adaptiveness of cloud computing differs widely across industry sectors. These observations show how the economic effects of cloud computing could be analyzed using our indicator so as to provide initial insight into empirical cloud computing economics and shape an agenda for further research on cloud computing. The newly founded insurance company CompuServe. 1996. Ho. such as the Commodore PET (introduced in 1977) and the Amiga 1000 (1985). We derive the following three suggestions for further research: 1.3 million net new jobs between 2010 and 2015 (Center for Economics & Business Research. confirming aggregate findings and painting a more nuanced picture. frustratingly for researchers wanting to investigate and quantify the growth impact of cloud computing. One of our contributions is that we propose an indirect measure of current or prospective cloud computing adoption that allows researchers to use existing large-scale firm-level panel datasets to analyze cloud diffusion and productivity effects via a reliable and plausible proxy. Cardona et al. (2013) give an overview of research on aggregate and firm-level ICT productivity effects. where one machine filled a large room and served all the researchers or employees of an institution. A primer in cloud computing 2. its main growth contribution came from total factor productivity (TFP) growth in ICT-using industries while growth rates in ICT-producing industries plateaued (Jorgenson. Cloud adaptiveness is potentially correlated to a firm’s position in the supply chain and thus suggests a linkage of cloud adaptiveness and the type of output the firm produces as well as the market in which it operates. 2005). and open design platforms (Gansky. 2005. 2001). Jorgenson. For example. The economic benefits of cloud computing adoption in the business segment of Europe’s largest economies are estimated to have created 2. We need to understand why firms implement cloud solutions and what they actually do with the Cloud. 2003) and Tambe and Hitt (2012) on the effect of computers on firm-level productivity. We aim to advance the understanding of enterprise cloud computing as well as of the firms using it and the potential mechanisms triggered by implementation of this innovation. 2.1. In Section 3. 2003. 2002. sharing companies. started renting out idle computing capacity to other companies around 1970. 2010). 2. the overall contribution of these industries to economic growth in the United States has been rather limited due to their low share of the economy. Bresnahan. & Stiroh. Jorgenson. IBM was the most important producer and developer of this kind of computing architecture (Bresnahan & Greenstein. mostly for hosting their e-mail systems and storing files in electronic form. “The Cloud” as a logical continuation of ICT-specific services emerged as an architectural innovation (Henderson & Clark. studies on cloud computing should be conducted at the industry level. 2001. who therefore shared the infrastructure. Section 4 introduces the data and our measure of cloud adaptiveness. Do they intend to increase productivity or flexibility. These productivity effects coincided with a massive reduction in hardware prices over the last decades.

(3) Infrastructure as a service (IaaS) is a more basic service mostly offering access to storage capacities (National Institute of Standards and Technology. Firms outsource their IT systems either completely or partially. high-speed networks further drove the development of cloud computing (OECD. There are three deployment models of cloud computing.. Importantly. Apostu. simplicity. Finally. 1. As Fig. So what is cloud computing? Cloud computing is actually a new manifestation of an “old trend. K. Grossman (2009) identifies scale. 2013. However. which reduced the upfront investment costs of IT-using firms and also improved the systems’ agility. 2013).. 2009. The spread of reliable. cloud computing involves pooling IT resources such as storage or processing in a virtual system serving multiple users. Vulpe. the Internet spread farther and farther and became faster and faster. The key characteristic of cloud computing is the virtualization of resources and services.” involving preexisting computing concepts and a novel combination of established components (Armbrust et al. but cloud users also benefit from additional services and scalability of capacities (Lin & Chen. 2009. cloud computing allows rapid elasticity (scalability) of resources and firms order and pay for only the capacity they actually need at that specific moment. 2009). . Suciu. such as enterprise resource planning (ERP) or customer relationship management (CRM). 2009. which not only leads to resource optimization but also facilitates billing. especially software developers. 2010) and eventually prevailed. modern thin clients could run applications and services hosted by a server with a graphical user interface. (1) Software as a service (SaaS). & Todoran. Suciu et al. 2012). Cloud computing combines the efficiency of a mainframe with the agility of a client/server system.2. cloud users often can purchase computing resources without any human interaction and at short notice (on-demand self-service). PCs were easy to use and assumed some of the computing tasks. 2. Operating systems and software were written and licensed by software companies. renting storage space or computing power from specialized providers. Source: Mell and Grance (2011). and pricing as the key defining features of cloud relative to conventional computing. allowing for hosts to be less capable (Bresnahan & Greenstein. However. the idea of using a mainframe to centralize vital functions and capacities continued to survive. (2) Platform as a service (PaaS) refers to access to platforms that allow customers. 1996). 1). This is somewhat similar to earlier hosting services. Capacities are assigned dynamically according to demand.. 2009). this thin client network system was a precursor to cloud computing (Leavitt. While mainframes required terminals with a command-line interface. 1 shows. The services provided are automatically measured. OECD. linked up to build a firm network. it took the development of open-source software and the adoption of Web 2. Cloud computing is billed based on a pay-per-use pricing scheme. began to compete with the IBM System 360 family of mainframes (Cusumano. 2009). to test or deploy their own applications in the cloud. where a customer purchases access to an application. Together with grid and utility computing. Candel Haug et al. Halunga. / Telecommunications Policy 40 (2016) 291–306 293 Fig. in contrast to simple server usage. broad network access is indispensable to access and use cloud services (Armbrust et al. where thin client systems or the Internet were used to provide software services to a small number of users. 2011). Mell & Grance. hosted and run in the cloud. This type of client/server structure predominated in the 1980s and 1990s. This definition mirrors the widely accepted definition of cloud computing by Mell and Grance (2011) of the US National Institute of Standards and Technology (see Fig. NIST definition of cloud computing. While traditional computing requires heavy upfront investment with fixed capacity. From the mid-1990s onwards. Resource pooling allows for specialization and the realization of economies of scale on the provider side. An early innovation quite similar to actual cloud computing involved application service providers (ASP).0 standards before a system using relatively simple code and that could be widely accessed was possible (Grossman. 2013). users therefore cannot locate their data in a certain geographic area.

which might lead clients to change their outsourcing behavior as they are losing bargaining power. Cloud computing users do not have to invest in powerful personal computers and servers and hence do not incur high upfront investment and related capital costs. as they have limited funds to invest in assets and suffer from unused peak capacities more than do large firms.. flexibility. 2011. using cloud services avoids opportunity costs due to underutilization of local IT equipment and outdated software and security standards (Prasad. specialization. the number of IT staff on-premises can be reduced as cloud services handle many tasks previously undertaken by traditional IT staff. Also. Cloud computing economics A review of the literature on cloud computing reveals that academic research is still exploratory and generalizable results few and far between. 3. 2011). Bandyopadhyay. but have to weigh them against the transaction costs of the outsourcing process (Riordan & Williamson. To our knowledge. 2013). 2011. Zhang. we have vendors that own and operate the required data centers and platforms. carriers. with users having developed a more precise idea of their needs. Etro. 2009. 2011. On the supply side of the public cloud market. Moreover. and suppliers refining their business models to meet them. they identify no universal cost advantage of cloud computing over on-premises IT systems. the firm can react more quickly to changing conditions in its business environment. However. Haucap. adoption and use of cloud computing” (Marston et al. & Heales. there is consensus in the literature that cloud computing reduces total IT costs for firms or at least for SMEs. Stepping. Lam (2013) studies cloud providers’ capacity investment incentives according to different market structures.”2 and better utilization of equipment (Brumec & Vrček. Google. prior work studies the possible economic effects using small samples or individual firms. Costs. This changing cost structure is considered to chiefly benefit small. cloud enablers add value to bare-bones cloud services. cloud computing could create up to 1 m jobs in the European Union. they incur variable expenses in the form of operating costs or pay-per-use fees (Armbrust et al. 2011). such as maintenance. The cloud computing market The cloud computing market is comprised of four major groups of actors: cloud consumers. Microsoft (Windows Azure). Hence. with Google (Google Drive).. so that most cloud carriers are telecommunication operators providing Internet access and connection (National Institute of Standards and Technology. Cardona et al. Other enablers include consultancies that help firms implement cloud architecture. Bayrak et al. 2 Hecker and Kretschmer (2010) further state that markets with high scale economies tend to concentrate. and firm organization One of the central economic results of cloud computing is the changing cost structure at the firm level. and risk while gaining flexibility. updates. Brumec and Vrček (2013) model the costs of cloud computing usage and compare them with the costs of a de-novo on-premise computing system and show that leasing computing resources from Microsoft. / Telecommunications Policy 40 (2016) 291–306 2. cloud auditors are expected to become of increasing importance in the near future due to growing security concerns. Conley. Etro (2009) conducted a macro-simulation and finds that by lowering entry barriers. Flexibility gains from cloud computing also affect firm organization. but stores its data on Amazon’s Simple Storage Service (S3) (TechTarget Glossary. there is as yet no empirical evidence confirming this cost advantage. In addition to the changing cost structure. This cost advantage could originate from a specialized cloud computing vendor reaping economies of scale vis-à-vis an in-house IT solution. A prominent example is Dropbox. we focus on the user side of the market. National Institute of Standards and Technology. Klems. or Amazon is cost efficient for less demanding applications. typically measured as the number of PCs in a firm. Cloud users can benefit from these efficiency gains. which offers storage and file sharing solutions.. Bayrak. In other words. . 2011). with products ranging from a complete cloud-based IT solution to select individual services. John. The biggest consumer groups are firms. 2011). & Stühmeier. 1985). 2014. positively affects firm productivity. Green. Hecker and Kretschmer (2010) call it “general wisdom [that] specialized outsourcing providers can produce more cost efficiently due to economies of scale. 2013). capacity investment (Lam 2013). The cloud computing market is close to a state of maturity. 2012. making cloud computing an important business- to-business (B2B) market.. cloud enablers “sell products and services that facilitate the delivery. Li. and enablers or complementors (Gerpott & May. 2013). Bräuninger. The common view in the literature is that cloud computing enables firms to reduce their fixed investments. but that it is still preferable to execute highly complex applications on-premises. 2013). overall costs.1. On the provider side.3. & Wilkie. Second. A third organizational and 1 In this paper. 2009. interesting economic issues include competition and industry structure. or additional-value service providers. providers. Yoo. & Tai. 2011. The flexibility of cloud computing even lowers entry barriers for new firms or sectors. there are no comparable data on cloud computing. including maintenance and upgrades of the system (Marston et al. and pricing. 2009. 2011). making them cloud complementors.1 3.. Candel Haug et al. Cloud carriers provide interconnection from providers to consumers. brokers. Marston et al.294 K. & Ghalsasi.. Nimis. 2014). Amazon (with Amazon Web Services) is the dominant provider. First. (2013) document that IT usage. and the like. Cloud enablers or complementors are auditors.and medium-sized enterprises (SME). Marston. Instead. and IBM (BlueCloud) distant followers (SearchCloudComputing. in which tasks and peak times can be more diversified (Armbrust et al. Finally.

albeit an insignificant one. the necessity and success of an innovation adoption depends on the firm’s organizational characteristics.. consisting of the industry. (2009) asked approximately 400 top IT executives of German firms to rate different application systems (e. neither study explains how cloud computing is defined. 3. and the resulting research agenda we take a first step toward closing this gap. market structure and competition. Alshamaila. such as size. regulatory factors across countries may also matter for cloud adoption. Most of the studies on SMEs involve a fairly small sample and typically focus on one sector and/or one country. firms with a security-sensitive environment might deliberately choose not to use cloud computing (Kshetri. 3. 2014).2. a firm needs to be able to assimilate the innovation. Kern. g. its market power. so that “alignment between the objectives of an organization’s IT strategy and business strategy is directly related to IT effectiveness and overall business/organizational performance” (Carcary et al. none of the studies we found explicitly address heterogeneity between industries or discuss explicit productivity effects. and a generally low level of cloud computing in the company’s sector. The study did not investigate drivers of adoption but a surprising 35% of survey participants claimed to be unaware of any cloud computing benefits. smaller firms are more likely than larger ones to adopt cloud computing. Stieninger & Nedbal. we structure our argument along the lines of Tornatzky and Fleischer (1990). regulation. however. collaboration with business partners. Existing microdata Benlian et al. the literature focuses on small firms as the decrease in upfront investment and the increase in flexibility are of particular advantage for these firms (Aljabre. production processes. 2012. as a well-performing substitute is already available (Shy. Papagiannidis. With our indicator. Overall. If a firm already has a sufficient technological infrastructure. Conversely. However. CRM) with regard to potentially adopting them in the form of software as a service (SaaS). who identify three broad areas that determine a firm’s adoption decision and the subsequent efficiency gains. Second. ERM. Similar transforma- tions occurred after the implementation of earlier technologies such as ERP and CRM (McAfee & Brynjolfsson. Hess. The survey samples of Trigueros-Preciado. The service sectors are expected to especially benefit from adopting cloud computing as they often dispose of huge amounts of data. the firm is more likely to be able to implement the innovation successfully and to realize economic benefits. all factors of the TOE framework were relevant for the adoption of cloud services. and the like. Alshamaila et al.. All three parts of the TOE framework seem to affect cloud computing adoption. They find that except for competitive pressure.1. allowing for changes in corporate culture. first observations. Pérez-González. Kreijger. 2013). 2008). and Buxmann (2009) find that large firms have a head start in SaaS adoption. the innovation has to fit the firm’s existing equipment and processes. and Li (2013) study cloud adoption in SMEs by conducting semi-structured interviews and analyzing the resulting data using the Technology-Organization-Environment (TOE) framework (explained in more detail in the following section). The Technology-Organization-Environment (TOE) framework applied to the cloud Based on the findings discussed above. & Willcocks. . respectively. (2013) show that among SMEs. Cloud computing and SMEs As mentioned above. and Solana-González (2013) and Stieninger and Nedbal (2014) include 94 firms from Spain and nine from Austria. For cloud computing. By contrast. Another interview-based study. that a high current level of technological infrastructure may also reduce the incremental benefits of adopting a new technology. Moreover. 2002. 1996). or work from various or different locations. 2009). and customer-faced services (Klems et al. which is why the literature has thus far focused on SMEs. It is shown that firm mechanisms and dynamics differ significantly by size (Mack & Rey. While most studies assume SMEs to be more likely to adopt cloud computing. and Conway (2013) finds that the most important reasons for cloud non-adoption are security concerns. the adoption of cloud computing is expected to shift the production possibility frontier of firms outward and thus should result in higher total factor productivity. 2014). In the case of cloud computing. 4. as well as its needs (technological context). need to exchange data with clients. and so forth. Unfortunately.3 An important prerequisite for cloud computing is an interconnected IT system within the firm and a broadband connection to the Internet.. The third determinant identified by Tornatzky and Fleischer (1990) is the firm’s environment. 2013). Data 4. the firm’s position in the supply chain. by Carcary. a firm’s incumbent ERP system may be just such a substitute. While 3 Note. Stieninger and Nedbal (2014) find that firms are afraid that their corporate image will be negatively affected if they use cloud computing and that they are also concerned about security and privacy management. this one of Irish SMEs. First.3. small and medium-sized enterprises (SME) are expected to benefit most from adopting cloud computing. Finally. Doherty. and the industry in which it is active all may (or may not) result in external pressure or requirements to adopt cloud computing. Further. the lack of time for implementation. / Telecommunications Policy 40 (2016) 291–306 295 potentially productivity enhancing effect of cloud computing is the alteration of business processes. Candel Haug et al. K. Benlian.

Laptops point to flexible working patterns. KPMG (2013). adopting cloud computing is less costly and acceptance among employees likely to be high. and the standardization of data were and are well-known components. we neither know exactly what was measured nor can we say anything about diffusion patterns given these studies are in a cross-section. To proxy a firm’s technological readiness for cloud computing adoption we use information on the number of network devices per employee and on the existence of a wide-area network (WAN) in the firm. The sample is largely representative. With this information we construct a composite indicator of cloud adaptiveness based on the concept of architectural or combinatorial innovations (Henderson & Clark. We assume that a firm with extensive network access possibilities and a good connection infrastructure is not only ready to use cloud computing in a next step. For them. Network devices allow direct access to internal networks or the Internet. This concept is based on the notion that existing technologies offer a vast set of components that can be combined and recombined to create new products and services. A WAN indicates that a firm has a good network connection.4 We define technological and organizational readiness and will assess other organizational characteristics and the firm environment in our subsequent empirical analysis. 4. as well as IT-specific information such as the number of desktop PCs.2. A cloud adaptive firm might already be using cloud computing or may adopt in the near future. 4 Varian (2010) terms this combinatorial innovation. infrastructure. Our definition of cloud adaptiveness matches the concept of architectural innovation developed by Henderson and Clark (1990). Goldfarb. including mobile access to firm data. Groupware. To identify economic effects. we compute the average across firms for each year and attribute a value of 1 to all firms with a number of network devices per employee or a share of laptops above the respective year’s mean value. with a slight bias toward medium-sized and large enterprises. When studying potential drivers of innovation adoption. This is exactly how cloud computing came to be. We proxy a firm’s organizational readiness by its usage of groupware software and the share of laptop computers. network devices. However. 1990) and the TOE framework (Tornatzky & Fleischer. However. but also likely to be particularly open to data transfer and interconnection. 1990). and Pernias (2012). especially if the surveys also include non-adopters. we need a variable for cloud computing usage that is consistently measured and invariant to who responds to the survey. and Kretschmer. Firms using this kind of IT structure are likely to introduce cloud computing at some point. rather. and so forth. The number of observations with cloud computing information is very low in our sample. and Deutsche Telekom AG (2010). and platforms as a service. . (3) share of laptops among all firm PCs. (2) usage of a wide-area network (WAN). CITDB contains detailed information on other IT resources and elements used in firms. A firm is considered cloud adaptive if all four criteria are met (see Fig. We build our indicator of cloud adaptiveness as a dummy variable that takes the value 1 if all four variables that describe the conditions for cloud adoption take the value 1. The same drawbacks are found in studies conducted for or published by firm research entities such as Deutsche Bank (Heng & Neitzel. Loebbecke. We therefore construct our measure by studying the usage and combination of crucial IT resources that together lay the groundwork for cloud computing in a firm. Firms using groupware and with a high share of laptops have already implemented organizational patterns compatible with a centralized and flexible IT structure. The CITDB has been used in prior studies such as Bresnahan et al. Our dataset covers the years 2000 through 2007 and includes general firm characteristics like the number of employees and industry classification. they are cloud ready or cloud adaptive. assets. and Greenstein (2012). 2012). in other words. or software. interconnected IT resources. laptops. Centralized computing and storage. We merged the technology data with financial data from the Bureau van Dijk ORBIS database so as to have company information on sales. IT employees. most likely in the form of leased priority lines and broadband. Candel Haug et al. surveys revealing decision makers’ preferences are the correct methodological choice. Our data and measure of cloud adaptiveness We use the CI Technology Database (CITDB). 1990). thus creating a common workspace. This means that firm employees are connected via IT and use common platforms. helps employees communicate or share documents. To do this. (2002). 2). Miravete. (2013) state that cloud computing is an evolutionary regrouping of earlier IT elements.296 K.000 European firm locations. We transform the two continuous input measures—number of network devices per employee (1) and share of laptop computers (3)—into dummy variables. / Telecommunications Policy 40 (2016) 291–306 these first exploratory results on the drivers of cloud computing adoption and economic effects are helpful. platforms. but the variable’s informative value is limited as there is no information on the underlying definition of cloud computing or on how the technology is understood by the person interviewed. which is that an innovation is not always a departure from core concepts or a radical change of components’ architecture. Kretschmer (2004). the idea of virtualizing computer and server structures and offering software. There is information on cloud computing usage in the latest Harte Hanks data waves. and (4) usage of groupware software (Fig. changes the linkages between the components and therefore constitutes an architectural innovation. and usage of different hardware and software. 2). such as Lotus Notes. “the essence of an architectural innovation [is] the reconfiguration of an established system to link together existing components in a new way” (Henderson & Clark. which was developed by the market intelligence firm Harte Hanks and covers more than 260. The variables are: (1) number of network devices per employee. Thomas. Forman. however. allowing particularly fast data transfers. an important feature of cloud applications. and Ullrich (2012) and Carcary et al.

However. we abstained from such an approach in our study. a limitation of our indicator is that it does not measure cloud computing as a technology or computing paradigm. as we preferably wanted to set up a general measure of cloud adaptiveness. In a survey. This means that the sampling methodology does not guarantee representativeness and the questions are derived from practical considerations. such as size) and at the firm environment (such as industry or supply chain position). However. we use a second sample (productivity sample) that is more restricted than the first sample due to the availability of variables needed to estimate the productivity measure (total factor productivity.5 We now apply our measure of cloud adaptiveness to the data and investigate the distribution and characteristics of cloud adaptive firms. but. the questions that need to be asked to obtain our input variables can be answered clearly and unambiguously.g. Given the variables and timeframe of our dataset. Another limitation is the equal weighting of the indicator’s four input variables. Our measure of cloud adaptiveness contributes to the literature by allowing researchers to use existing large-scale datasets for their work.434 companies in 13 European countries. We cannot measure the outsourcing and the scalability characteristics of a cloud and thus provide a lower bound of potential effects associated with being cloud adaptive. We use two unbalanced panel datasets for our analysis. adaptiveness serves as a proxy for cloud computing. Observations on cloud adaptiveness Our cloud adaptiveness measure captures a firm’s technological and organizational readiness to adopt cloud computing. we split the sample into technologically sophisticated firms (firms whose PC intensity is above the sample median of PC intensity) and non-sophisticated firms: 99% of the non-sophisticated firms are also non-cloud- adaptive. As a robustness check. the dataset has been proven useful and reliable in a number of academic studies. This is a simplification that cannot be remedied as long as there are no other studies on cloud computing and the transition from more traditional IT systems. Firm-level surveys asking about the “usage of cloud-computing” are thus of limited explanatory power. the readiness of a firm to use it. see the Appendix. However. a period during which actual cloud services were not yet widely used. Our data cover the years 2000–2007. / Telecommunications Policy 40 (2016) 291–306 297 Fig. Source: Authors’ own diagram.985 observations from 25. The first sample (adoption sample) is comprised of 73. For the paper’s productivity analyses. organizational characteristics of cloud adaptive firms. regression-based approaches of constructing composite indicators typically require a priori information on the selection of a dependent variable as target variable. We develop a first measure of the phenomenon based on more precise firm-level data. a limitation of our analysis is that the Harte Hanks data were not collected by a research institution. Clearly. . we document the productivity levels of cloud adaptive firms. Further. we might be measuring a firm’s technological sophistication rather than its actual cloud adaptiveness.28. Moreover. while 47% of the non-cloud-adaptive firms have a PC intensity above the median so that one does not automatically imply the other. the indicator was constructed by focusing on the technological and organizational readiness for cloud computing and therefore measures a particular form of sophistication. Additionally. Cloud adaptiveness indicator.. the term “cloud computing” has not been well defined—neither in academic research nor by practitioners. While the structure of our measure can be used for other datasets as well. K.g. implying that all four factors are equally important in classifying a firm as cloud adaptive. 5. 2. 5 For more information on the data. The descriptive observations in this section follow the TOE framework by looking at correlates of cloud adaptiveness (e. instead. Candel Haug et al. thus providing an early set of empirical findings on cloud computing at the firm level. Alternative approaches of varying weighting schemes like e. The correlation between the sophistication dummy and the cloud dummy is 0. TFP). to date. This is a typical problem when working with proxies and cannot be entirely overcome.

whereas the share of large-firm adopters continues to rise.. Shy. However. Hence. Hence. 2014. It does not cover public administration or utilities. but this finding does not lead to easily interpretable stylized facts about firm adoption behavior. our results over time are somewhat surprising (Fig. Candel Haug et al. The characteristics of cloud technology differ from those of general IT and the literature contends that SMEs benefit more from cloud computing due to its pay-per-use and scalability features. which could explain this sector’s high share of cloud adaptive firms (Fig. which is lower than that of large firms. almost by definition.1. 4).298 K.’s (2009) finding that when it comes to SaaS adoption. it does capture whether firms have a highly interconnected IT structure and use central communication platforms. 2011) while avoiding high upfront investment. large firms may have experience with early cloud-like structures. the situation of medium-sized firms is ambiguous. standardized systems often cannot satisfy the varying needs of the different firm departments. the cloud adaptiveness of small firms plateaus. small firms catch up within several years whereas medium-sized firms do not..” 5. large firms often have professional IT departments that keep abreast of trends and constantly work to optimize the company’s IT structure. Second. We would expect large firms (those with more than 249 employees) to be clearly ahead of small firms (those with less than 50 employees) when implementing productivity-enhancing IT. However. ORBIS. this also means that they might achieve lower cost advantages from cloud computing adoption than smaller firms as large firms might already be realizing economies of scale with their original data centers and IT networks (Marston et al. . small firms exhibit the same level of cloud adaptiveness as large firms in 2002 and 2003. small firms’ tasks tend to be more homogenous and generate rather uniform data. Large firms are early adopters but small firms catch up quickly Differences in adoption behavior between smaller and larger firms are found in several empirical studies on general IT (Nguyen. 5. While the different structures and challenges of small and large firms are intuitive to a large extend. Prasad et al. For example. firm size seems to be associated with cloud adaptiveness. The tertiary or services sector6 is typically more data intensive than the manufacturing sector. While our results match our expectations at the beginning and end of our panel period. financial services are highly data intensive. Sample: Adoption sample. However. there is no significant difference between small and large enterprises. However. while small firms are less able to make this type of investment and thus are not expected to be among the early adopters (Mack & Rey. Source: Harte Hanks. 2000). large firms have the financial means to afford high investment in IT. the market in which it operates. 1996).2. allowing firms a degree of financial and capacity flexibility (Sultan. 2011. the early catching up of small firms is not that surprising after all. This coincides with Benlian et al. Large firms tend to have a more complex task structure than small ones and thus need various types of software and hardware (Kretschmer. Further. 3. Finally. The transaction costs of becoming cloud adaptive are therefore lower for small than for large firms. firms with 249 employees and less (small and medium-sized) have similar levels of adaptiveness. 2014). 6 Our definition of the service sector includes business and financial services as well as trade and partly privatized sectors such as health or education. authors’ own calculations. Our adaptiveness dummy cannot reflect this property. In our panel. and. / Telecommunications Policy 40 (2016) 291–306 Fig. there is empirical evidence that large firms imitate innovations more quickly than small ones (Geroski. Conversely. Rogers (1995) states that size is “probably a surrogate measure of several dimensions that lead to innovation. Later in the sample period. 2009) and are expected in the case of cloud computing as well. First. The industry in which a firm is active shapes the firm’s technological needs as well as its organizational characteristics. 3). Cloud adaptiveness by firm size. at the organizational level. for the years 2004 through 2007. 2004). Service firms are more cloud adaptive than manufacturing firms We expect to find heterogeneity across sectors in cloud adaptiveness.

which can be a highly data-intensive process. In manufacturing. This statement applies more generally to supply chains. Cloud adaptiveness by sector. In their survey of Irish SMEs. Carcary et al. upstream capital goods industries are more cloud adaptive than downstream consumer goods industries. we use the European statistical definition of main industrial groupings according to Commission Regulation (EC) No 656/2007 of 14 June 2007. (2013) find that the majority of the cloud adopters in their sample are companies active in the KIBS sector. industrial electronics. Pentek. services were viewed as technologically backward and passive adopters of technology. however. 2014. authors’ own calculations. and materials—serve as inputs to firms’ internal value chains. this could change with the advent of “smart factories. Goods are often tailored to customer needs. intermediate goods sectors are usually more specialized and therefore do not need the same flexible interconnecting capacities as businesses in the capital or consumer goods sectors. mostly supplying technically advanced machinery for production. However. More sectoral-level research is needed to better understand the role of cloud adaptiveness in single sectors. Candel Haug et al. and requiring time-sensitive communication with clients and trading partners. 7 In the German-speaking countries. 2010) such as consulting or IT outsourcing that create value by transferring their knowledge to clients.0” (Hermann. but this view has changed dramatically with tertiarization and information technologies (Musolesi & Huiban. particularly in sectors where product lifecycles are short. the latter. increased use of procurement platforms might result in upstream sectors catching up. ORBIS. Data-intensive applications are also required in logistics and transportation.9 Also. . in manufacturing firms producing on-premises. indeed.” in which production is highly interconnected and computer optimized. 1985). automated processes. it not only has high technological requirements. / Telecommunications Policy 40 (2016) 291–306 299 Fig. 5). firms in the capital goods sectors such as machinery. In production theory. 2010).7 5. which themselves produce capital goods. being upstream industries. which requires sophisticated data management and transfer systems. as the capital goods sector is embedded at different stages of the value chain. The same holds for knowledge- intensive business services (KIBS) (Mack & Rey. More precisely. where supply-chain optimization. processing research and trading operations and computational algorithms for risk management. A survey of the fashion and apparel sector discovered that one reason for the limited use of e-business applications within the industry was the “lack of interoperability between the many systems in use” (DG Enterprise & Industry. but still has higher rates of adoption than intermediate sectors. factors of production—capital. which depend more on markets and customers. In our data. 2012). The consumer goods sector is less cloud adaptive. are surprisingly non-cloud-adaptive (Fig. storing and transmitting large amounts of data. upstream firms provide materials and intermediate inputs to firms more downstream the supply chain.3. which link up to form an industry-wide supply chain (Porter. but also engages in marketing and sales activities. 8 To classify industries. K. These are then used by firms farther down the supply chain to produce consumer goods. and measurement equipment show higher cloud adaptiveness than firms in the consumer and intermediate goods industries. 4. Sample: Adoption sample. Source: Harte Hanks. Musolesi & Huiban. 9 Of course.8 A possible reason for this is that upstream sectors are not incorporated into e-business operations as much as sectors in the middle and closer to the end of the supply chain. a traditional server structure is often more appropriate. In manufacturing. and consolidation of global supply-chain providers are a source of competitive advantage. & Otto 2015). Traditionally. labor. this phenomenon has been termed “Industry 4. Scalability and mobility are crucial in services.

whereas retail shows a very 10 Cloud adaptiveness of a sector is not correlated with firm size in the sector.300 K. Falck. such as health. cloud adaptiveness can differ significantly within single supply chains In our sample. but also a flow of goods. In services. in contrast to other service sectors. In our data. / Telecommunications Policy 40 (2016) 291–306 Fig. Hence. Data security and quality of services are requirements a health-care network or cloud system needs to fulfill. they have not only a flow of information. and social services. that is. Wholesale firms work closely with producers but they do not produce goods themselves. 2012). state-dominated industries. and Kühling (2013) analyze the diffusion of e-health. the wholesale sector is one of the most cloud adaptive service industries. the low cloud adaptiveness of these sectors could be due to insufficient service stability. are the least likely to be cloud adaptive firms (Fig. while retail trade and regulated.4. 6. as well as wholesaling. 6). Cloud adaptiveness in the services sectors. but that information exchange and teleconferencing are not widespread. 5. education. requiring not only the treatment but also the exchange of data permanently and in real time. unregulated market sectors are more cloud adaptive than nonmarket sectors. the lack of each of which leads to a lack of trust and security in cloud computing. Candel Haug et al. A characteristic of the retail and wholesale businesses is that. the highest shares of large firms are in the finance (high cloud adaptiveness) and retail (low cloud adaptiveness) sectors. They find that doctors and hospitals use some ICT applications. business and financial services.10 This is intuitive as business and financial services are very data-intensive sectors. Haucap. They resell to retailers. interconnecting ICT applications in the health-care sector. Fig. who in turn sell the goods to private consumers. 5. are the most cloud adaptive service sectors. and the absence of widespread cloud certification services. Cloud adaptiveness in manufacturing. a still incomplete legal framework for (international) cloud services. . along the supply chain (Prajogo & Olhager. For example.

2012).6.11 In Fig. cloud adaptive firms are more productive than non-cloud-adaptive ones and we also find significant mean differences for almost every sector. The correlation between a sector’s cloud adaptiveness and the productivity difference between adaptive and non-adaptive firms in this sector is slightly negative.g. An alternative productivity measure is total factor productivity (TFP). these improvements are either in labor productivity or in TFP. this is not what we find in the data (Fig. Still. Cloud computing could further enhance these advantages.13 According to our estimates (Fig. The retail trade market is currently experiencing the emergence of large players that pressure smaller suppliers into the adoption of their specific IT systems (DG Enterprise and Industry. In all service sectors. Looking downstream. in the near future. there is empirical evidence that cloud computing and firm productivity are highly correlated. cloud adaptive firms are more productive Evidence on the productivity effects of adopting cloud applications is scarce. However. However. it is a more appropriate measure of technical change. especially since integrated logistics system can help reduce shortages and optimize inventories (Prajogo & Olhager. IT integration of a supply chain is not costless. they also are more successful in the choice and employment of technologies. We would expect similar intra-industry effects driven by modern ICT like cloud computing and its direct precursors. not only communicating and negotiating. with regard to cloud adaptiveness. / Telecommunications Policy 40 (2016) 291–306 301 weak disposition toward cloud computing (Fig. and transport equipment. 2012).14 This finding shows a strong heterogeneity among a sector’s cloud adaptiveness and its firm-level productivity performance. This is surprising at first sight as both are closely vertically related and basically execute very similar tasks. the residual in the firm’s output function after having controlled for capital and labor as physical inputs. However. these companies manage and maintain a large distribution network. the time period most productivity studies focus on (Tambe & Hitt. 7(2)). but also observing and analyzing the development of international markets. IT-driven intra-industry productivity differences are found in several studies controlling for various other factors (e. They find that implementing information technology such as scanners and electronic data interchange (EDI) that allows quicker order processing and sharing of demand and inventory data can reduce supply chain costs by as much as 10%. which further allows for the incorporation of spillovers and therefore proxies for cloud computing as a general purpose technology. 1996. 11 We find the same qualitative results in the services sectors. Interestingly. The partly insignificant differences might be due to higher within-sector firm heterogeneity. A causal specification needs to resolve whether these productivity differences are driven by cloud adaptiveness. We therefore expect retail companies to catch up. wholesale tends to operate at a global scale and therefore faces a much greater challenge in organizing both the flow of information and the flow of goods. Tambe & Hitt. This method ensures consistent estimates of inputs in the production function and thus enables unbiased calculation of total factor productivity by subtracting estimated input contributions from output. except for the machinery sector. 2012). but the picture is less clear. In manufacturing. Their operations differ in scale and complexity though. which was reasonable in the 1990s. 12 Labor productivity is measured as sales divided by employment. We find no significant differences in the financial sector or in the health/education/social sector. we follow Levinsohn and Petrin (2003). Employing our cloud adaptiveness measure for two different types of productivity measures separated by industries provides some initial observations on the productivity of cloud adaptive and non-cloud-adaptive firms in manufacturing sectors. Cachon and Fisher (2000) conducted an empirical study on the value of information sharing in a grocery supply chain between supplier and retailer.. 5. Hence. 2012). Retail business is generally locally oriented. 6). A global wholesale company needs to be constantly in touch with geographically dispersed producers.5. These findings underline the importance of accounting for the specific nature of cloud computing as it is incorporated in technical change. Cloud-similar technologies are not necessarily adopted in the sectors where they allow for the highest productivity We would expect industries in which cloud adaptive firms have a large productivity advantage to also have a high adaptiveness rate. it is surprising that companies upstream and downstream the supply chain can cooperate without being fully integrated. it reflects the joint influence of a host of factors and therefore it is easily misinterpreted as technical change. not necessarily both. As labor productivity is only a partial productivity measure. For further explanation. 5. Standardized cloud computing solutions might be cheaper and more widely compatible. Sectors with large differences in labor productivity are instruments. 13 To estimate TFP at the firm level. 14 Note that in this section we consider both manufacturing and service sectors. Brynjolfsson & Hitt. Candel Haug et al. measured by total factor productivity. Cardona et al. (2013) confirm that most studies use either PC intensity or IT capital as a measure for IT. This method accounts for biased coefficients of the production function originating from unobserved productivity shocks by explicitly modeling capital and intermediates within the estimation. cloud adaptive manufacturing firms generally exhibit higher average labor productivity12 compared to manufacturing firms that are not as cloud adaptive. . Not only do cloud adaptive firms achieve higher sales per employee. without using the same IT structure and communication channels. K. chemicals. By contrast. 7(1). as TFP abstracts from the effect of inputs. which can no longer be measured based on capital as services became an essential part of it. there are TFP differences throughout all manufacturing sectors. Our analysis does not allow drawing causal conclusions on the productivity effects of cloud computing or cloud adaptiveness. that is. 8). see also Van Beveren (2012). a locally operating retail firm requires less e-business interaction.

a given adaptiveness in the print sector is associated with relatively low TFP differences between cloud adaptive and non-cloud-adaptive firms. firms often choose to adopt for non- . While e. it might take a while to catch up. (b) TFP in manufacturing industries.4). While these measures might not be productivity-enhancing in the short run. particularly at the start of an innovation adoption lifecycle. bounded growth potential of the industry or particular market characteristics.302 K. so that TFP differences between cloud adaptive and non-cloud-adaptive firms in a sector only weakly correlate with the adaptiveness share. they can secure the survival of the firm in the medium or long run. more productive firms might be more cloud adaptive in general. Further. However. the same given adaptiveness is associated with high TFP differences between firms in retail. (a) Labor productivity in manufacturing. One driver of adoption is flexibility gains (see Section 3). One potential explanation why firms’ productivity advantages are not necessarily associated with its cloud utilization across all sectors is reverse causality. adoption of the software and hardware that readies firms for cloud computing might be driven by factors other than direct productivity gains. Moreover. / Telecommunications Policy 40 (2016) 291–306 Fig. 7. become cloud adaptive and realize the productivity advantage. Another explanation of the low adaptiveness in sectors with a high productivity potential is a first-mover advantage meaning that the firms that became cloud adaptive first realize productivity advantages other firms cannot. recall that the productivity measure of TFP is not input driven.g. Another reason for adoption is pressure from business partners or the necessity of integrating into a supply chain (see Section 5. Candel Haug et al. If a firm observes a cloud productivity potential in its sector. This can be due to limited needs of this technology in the sector. That is.

in the manufacturing sector we find positive productivity differences between cloud adaptive and non-cloud-adaptive firms. We also find that the service sector is more cloud adaptive than the manufacturing sector and that it is especially business services and the financial and wholesale sectors that are most cloud adaptive. future work should attempt to discover the key characteristics that prompt firms to adopt cloud computing and result in successful. Candel Haug et al. especially at the firm and industry level. Harte Hanks. We develop a measure of cloud computing that lets us examine its diffusion pattern and its association with firm productivity across industries.g. Further.. rather. Dataset We use a dataset with data from two sources: (1) the Harte Hanks CI Technology Database (CITDB) and (2) Bureau Van Dijk’s ORBIS. More specifically. or even more fine-grained aspects). conducts annual telephone surveys to take stock of specific IT types used by individual sites (establishments) of more than 10. Conclusion Cloud computing is expected to generate productivity effects in firms and growth in the economy. 8. Our measure builds on an existing panel of firm-level data and takes into account the genesis of cloud computing as an architectural innovation. communication. With the help of the TOE framework and based on this paper’s observations. or IT departments that are autonomous and agile in their adoption decisions. for example. cloud computing adoption varies based on a firm’s position in the supply chain and thus suggests a linkage of cloud adaptiveness and the firm’s type of output or its market power in addition to its industry. studies on cloud computing should be conducted at the industry level due to massive heterogeneity. TFP differences and cloud adaptiveness. and collect information on how cloud computing affects firm costs. innovativeness as an important part of corporate image. it is other firm characteristics that are correlated with the adoption decision. SaaS. be based on a precise and thorough definition of cloud computing. care should be taken to discover which elements of cloud computing firms actually implement (e.000 German firms. Appendix A. Our approach enables scholars to work on diffusion and productivity and to establish appropriate econometric identification strategies that help test theoretical predictions. With a view to the currently still poor data situation. Finally. to understand the underlying potentially productivity-enhancing mechanisms. a manager’s interest in technology. the economic effects of cloud computing can be understood and a consistent framework of cloud computing economics can be developed. The first step was the identification of all establishments that belong to one company. PaaS. This productivity advantage. and organization. / Telecommunications Policy 40 (2016) 291–306 303 Fig. we suggest employing our cloud adaptiveness dummy in future empirical research on cloud computing and the underlying economics of it. K. We . survey firms on their business and production processes that use a cloud service. productivity-enhancing implementation. We thus observe firms’ cloud computing adaptiveness over time and study adoption and productivity patterns at a stage where comprehensive firm-level panel datasets on cloud computing are not yet available. In the long run. As the CITDB data are collected at the establishment level while the ORBIS database covers the company level. IaaS. Our findings show that firm size is not a good predictor of cloud adaptiveness per se. Our six empirical observations give us an opportunity to suggest an agenda for further research. does not necessarily benefit a large fraction of the firms in this sector. Interestingly. By modeling and quantifying such underlying mechanisms. a market intelligence firm. data-collection efforts should focus on a representative panel. given that the concept of cloud computing is very broad. and what they actually do with it. we aggregated the Harte Hanks dataset to the company level or extrapolated where required. economic reasons. however. 6.

“Other sectors” include the primary.18 Firm size Small ( o 50) 8270 25.30 1 0 1 Cloud adaptiveness (Cloud) 73. and public administration sectors. Candel Haug et al. Health/Education/Social.29 0 0 1 Notes: Descriptive statistics are based on observations. Employees 73. amusement sector).076 5.091 5.96 Other 7152 9. and public administration sectors. Financial Sector.95 Medium (50–249) 39. Notes: A firm can grow or shrink throughout the panel. and Other Services (legal.53 9.985 457.25 14.69 7194 4. Max. Integers. construction. Median Min. % Num. and the three-digit SIC code of every observation.98 Services 25. Refer to Tables 1–4 for sample statistics. were summed and expressed as relative numbers (per employee).73 7.51 Industries Manufacturing 20. GROUP. Wholesale.74 1.30 Data: Harte Hanks CI Technology Database. Adoption sample Num. . amusement sector). The service sectors include Retail. Adoption sample Num.04 4090.68 14. and repair services.985 0.44 13. Business Services.14 11.985 100.4 Wide-area network (WAN) 73.67 2593 2.985 0. of obs. We chose this approach because of the high number of missing data points for the balance sheet variables required for the productivity analysis. of obs. construction. Financial Sector.50 1 0 1 Share of laptops among all firm PCs (LAP) 73.451 62.063 23.65 9.13 7.06 6671 7. unbalanced panel from 2000 to 2007.1–5.94 Industries Manufacturing 41. Health/Education/Social. Transportation.71 9.396 53.36 Large ( Z 250) 7771 23. Wholesale. Table 3 Sample statistics and distribution of cloud adaptiveness in the productivity sample. of network devices per employee (NET) 73.526 23.5 and 5.00 25.71 6545 5. we had two types of technology variables to aggregate: dummy variables were set to 1 at the firm level if any of the company’s establishments used this technology. the zip code. unbalanced panel from 2000 to 2007.89 9143 6.05 14. for example. such as the total number of PCs.17 10.00 11.91 11.05 Medium (50–249) 16.1 0 1 Groupware (GROUP) 73.608 100. % Num.072 33. Next. the results were cross-checked carefully and in some cases weighted.69 0.567 50. As the data structure is rather complicated and sometimes misleading. / Telecommunications Policy 40 (2016) 291–306 Table 1 Sample statistics and distribution of cloud adaptiveness in the adoption sample. and repair services.81 5995 6.51 9.53 0.985 0.4 of the paper and (2) the more restricted productivity sample for Sections 5.698 5. of firms % of cloud adaptive firms In 2000 In 2007 Total sample 73.6.36 2909 3. Table 2 Descriptive statistics of input variables in the adoption sample. Adoption sample Num. ORBIS balance sheet data. personal. and 0 otherwise.985 0.761 56. “Other sectors” include the primary. public utilities. Notes: A firm can grow or shrink throughout the panel.09 0. In this paper we use two different extracts from the resulting panel dataset: (1) The adoption sample for Sections 5.65 Other 2598 7.58 Firm size Small ( o 50) 17. public utilities.13 7. Business Services.48 Data: Harte Hanks CI Technology Database.304 K. of firms % of cloud adaptive firms In 2000 In 2007 Total sample 32.61 12.93 11.53 0 177. ORBIS balance sheet data.09 Large ( Z 250) 17.90 0.070 Num. The service sectors include Retail.434 5. not firms. personal.20 0. dev.31 3552 7.97 994 2. Transportation.985 0. of obs.43 Services 9559 29.16 0.83 3328 8. and Other Services (legal. Mean Std. matched bvd (Bureau van Dijk) company IDs to the CITDB site IDs using the company name.23 105 1 260.

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