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Economic Theory of Business and the Internet - Coggle Diagram

- - - - The countries that experienced faster diffusion of IT, in turn, had faster productivity growth in the 1990s than those countries that experienced slower diffusion.
      - Information Technologies can influence economic growth in general and productivity in particular through three channels:
        
        Production of the (national) Information Technology (IT) sector.
        
        Use of IT as a contribution to the production process;
        
        Effects derived from IT.
        
        ICTs can have an impact on economic growth and productivity through their effect on the production of the IT sector, the use of IT in production processes and the spin-off effects.
- - - - The transaction cost is defined as, "the cost of negotiating and concluding a separate contract for each exchange that takes place in the market."
        It is the cost that arises from using the price mechanism due to lack of trust.
        
        The transaction cost appears when a contract is negotiated, when any economic relationship is established, a transaction cost is associated with it.
        Transaction costs have nothing to do with creating or owning a product, so they can be related to the work of an intermediary.
        On the Internet, as there are no geographical limits, the consumer can find many providers of the product they are looking for and the company will always be willing to serve them, because the website does not need to sleep and does not depend on a state of mind for the sale.
- - - - Creating value at any stage of the virtual value chain involves a sequence of five activities: integrating, organizing, selecting, synthesizing, and distributing information.
        This is how an administrator today collects raw information and adds value through these steps.
        Adapting to a Virtual World
        
        In effect, these value-added steps, in conjunction with virtual value chains, make up a value matrix that allows companies to more effectively identify customer wants and satisfy them more efficiently.
- - - - By using the Internet as a new intermediary to carry out the different transactions in different market sectors, there is the advantage that operators (representatives, stockists, distributors, salespeople, etc.) can replace catalogs or samples with photos and text on the Web , manufacturer; this greatly benefits both the consumer and the manufacturer, as time and money can be saved in traditional operations.