# A Statistical Analysis of Industrial Penetration and Internet Intensity in Taiwan +
## 4 Data and Variables
The _computer_2 variable is used to measure the contagion effect for internet technology within a certain area. Table 2 gives the variable definitions, and Table 3 provides the descriptive statistics for the explanatory variables. As described in Section 3, we use the Heckman two-stage estimation procedure to obtain the estimates of parameters of the sample selection model, which is specified as Equation (8):  
\[ \begin{array}{c}y_{i}=\beta_{0}+\beta_{1}HHI_{j}+\beta_{2}Export_{i}+\beta_{3 }GHHI_{j}+\beta_{4}city_{i}\ +\beta_{5}computer1_{i}+\\ \beta_{6}computer2_{ji}+\ \beta_{7}size_{i}+\beta_{8}\lambda_{i}+\varepsilon_{yi} \end{array}  \tag{8}\]  
where \(y_{i}\) is the ratio of total expenditure on internet use to total sales of firm \(i\) (intensity of internet use), and \(\varepsilon_{yi}\) is the disturbance term. \(HHI_{j}\) is the Herfindahl-Hirschman index for industry \(j\) to which firm \(i\) belongs, export_rate\({}_{i}\) is export intensity for firm \(i\), \(GHII_{j}\) is the Geographical Herfindahl-Hirschman \begin{table}
\begin{tabular}{c l} \hline \hline
**Variables** & **Description** \\ \hline \multicolumn{3}{l}{**Dependent variable**} \\ \hline \(y_{i}\) & the extent to which the firm \(i\) use the internet = (online purchase amount + online sales \\  & amount)/total sales \\ \hline \(z_{i}\) & \(z_{i}=1\), if firm \(i\) use an internet equipment for business information \\  & \(z_{i}=0\), otherwise \\ \hline \multicolumn{3}{l}{**Independent variable**} \\ \hline \(HHI_{j}\) & Herfindahl-Hirschman Index for industry \(j\) \\ \hline \(CR4_{j}\) & Top Four firms Concentration Index for industry \(j\) \\ \hline \(export_{i}\) & Export share for firm \(i\) = export value/total sales \\ \hline \(GHHI_{j}\) & Geographic Herfindahl-Hirschman Index for industry \(j\) \\ \hline \(size_{i}\) & Firm size: total number of employees for firm \(i\) \\ \hline \(computer1_{i}\) & Total expenditure on computer equipment for firm \(i\): unit NTS1000 \\ \hline \(computer2_{i}\) & Total expenditure on computer equipment within the same industry and same area, excluding the expenditure of firm \(i\): unit NTS1000 \\ \hline \(city_{i}\) & \(city_{i}=1\), if firm \(i\) is urban; \(city_{i}=0\), if firm \(i\) is rural \\ \hline \(group_{i}\) & \(group_{i}=1\), if firm \(i\) has no subsidiary (branch); \(group_{i}=0\), otherwise \\ \hline \hline \end{tabular}
\end{table} 
Table 2: Variable Definitions. \begin{table}
\begin{tabular}{c c c c c} \hline \hline
**Variables (Unit)** & **Mean** & **Std Dev.** & **Min** & **Max** \\ \hline \(y_{i}\) (100\%) & 1.9998 & 43.2231 & 0 & 7153.077 \\ \(z_{i}\) & 0.6069 & 0.4884 & 0 & 1 \\ \(HHI_{j}\) & 0.0322 & 0.0656 & 0.0020 & 1 \\ \(CR4_{j}\) & 0.2053 & 0.1683 & 0.0407 & 1 \\ \(export_{i}\) & 0.0709 & 0.1669 & 0 & 1 \\ \(GHHI_{j}\) & 0.0031 & 0.0239 & 0 & 0.4752 \\ \(size_{i}\) & 16.7994 & 113.8733 & 0 & 17,040 \\ \(computer1_{i}\) (NTS1000) & 0.0029 & 0.2871 & 0 & 99.2 \\ \(computer2_{i}\) (NTS1000) & 0.4011 & 6.4387 & 0 & 1264.754 \\ \(city_{i}\) & 0.1845 & 0.3879 & 0 & 1 \\ \(group_{i}\) & 0.9327 & 0.2505 & 0 & 1 \\ \hline \hline \end{tabular}
\end{table} 
Table 3: Descriptive Statistics. index for the industry \(j\) in region \(k\) that firm \(i\) is located to, \(city_{i}\) is a dummy variable, indicating the firm's geographical location, when city\({}_{i}=1\) if firm \(i\) is located in the city, city\({}_{i}=0\), otherwise, \(computer1_{i}\) is the cost of buying the computer equipment for firm \(i\), and \(computer2_{i}\) is the total cost of computer equipment within the same industry and same area, after deducting the expenditure on computer equipment of firm \(i\) itself. The variable \"computer2\(i\)\" captures the contagion effect for internet technology in the same area and industry. The variable \"\(size_{i}\)\" captures the firm's characteristics.