Factors Explaining ICT Expenditure Behavior of Greek Firms During the Economic Crisis 2009–2014

The financial and economic crisis of 2008 affected negatively investment in general, and investment in ICT was not left unchanged, with negative consequences for firms’ future performance and competitiveness. So this paper aims at investigating factors explaining firms’ crisis behavior with respect to ICT investment and ICT operational expenditures, i.e. their crisis vulnerability of ICT expenditures, for the crisis period 2009–2014. To this end, we examine the effects of six groups of factors on firms’ ICT investment and expenditure behavior during the crisis 2009–2014: three groups of internal factors and three groups of external factors. We focus our analysis on the internal ICT-related factors; we need all other factors in order to be able to appropriately specify two econometric models, one for ICT investment expenditures and a second one for ICT operational expenditures, and avoid omitted variable bias. The analysis of the factors that may influence the likelihood of a reduction of ICT investment and operating expenditure as a consequence of the crisis is primarily explorative, thus driven by available data and economic intuition. Our study is based on Greek firm data from the manufacturing, construction and services sector that have been collected in 2015/2016. We find that all six groups of variables contribute significantly to the explanation of both ICT investment and ICT operational expenditures during the crisis period 2009–2014, even if not to the same extent and not for each of the two dependent variables.