Short answer
When introducing new digital technologies or systems, anticipate a period of increased market volatility followed by a stabilizing effect on capital markets.
- Field
- Innovation & Markets
- Source
- Industria Textila (2023)
- Method
- Econometric modeling (ARDL and GARCH models)
- Evidence
- Moderate effect
Increased adoption of Information and Communication Technology (ICT) in the textile industry, specifically through a higher ratio of online transactions, initially heightens capital market uncertainty but leads to a reduction in the long term. This innovation & markets research insight is drawn from a 2023 study published in Industria Textila. Using Econometric modeling (ardl and garch models), researchers explored how this design variable affects real-world outcomes. The key design takeaway: When introducing new digital technologies or systems, anticipate a period of increased market volatility followed by a stabilizing effect on capital markets.
ICT adoption in textile manufacturing can reduce capital market uncertainty over time.
Increased adoption of Information and Communication Technology (ICT) in the textile industry, specifically through a higher ratio of online transactions, initially heightens capital market uncertainty but leads to a reduction in the long term.
Industria Textila · 2023
Key Findings
- 01In the short term, an increase in the ratio of online transactions to the total volume of transactions has increased capital market uncertainty.
- 02In the long term, an increase in the ratio of online transactions to the total volume of transactions has reduced capital market uncertainty.
- 03Inflation, economic growth, and exchange rate significantly affect the performance uncertainty of the total stock exchange index.
- 04It takes approximately 7.5 quarters on average for imbalances in capital market uncertainty to be completely offset.
Application
Design takeaway
When introducing new digital technologies or systems, anticipate a period of increased market volatility followed by a stabilizing effect on capital markets.
How to apply
When proposing or implementing digital transformation projects, include a risk assessment that accounts for potential short-term market uncertainty and a projection of long-term stability gains.
Project actions
- 01Consider how your design project's adoption of new technology might affect market perceptions in the short and long term.
- 02If your project involves digital integration, research the economic context of its implementation.
Method & Evidence
Variables
Strengths & Limitations
Strengths
- +Utilizes established econometric models (GARCH, ARDL) for robust analysis.
- +Investigates both short-term and long-term effects, providing a nuanced perspective.
Limitations
The specific economic conditions of Iran and the focus on the textile industry limit the universal applicability of these findings.
Reliability & validity
The use of established econometric models and a defined time period enhances reliability. Validity is supported by considering multiple economic factors alongside the primary ICT indicator.
Think critically
How might the specific nature of the textile industry's supply chain and market dynamics influence the observed short-term versus long-term effects of ICT adoption on capital market uncertainty?
Design Principles
"Technological adoption often exhibits a lag effect on market stability, requiring patience for long-term benefits to materialize."
This research highlights a temporal dynamic in the impact of technological adoption on market stability. For design and engineering professionals, understanding this lag effect is crucial when forecasting the broader economic implications of implementing new digital systems within their respective industries.
What This Means for Your Design
Using more online tools in a business, like in the textile industry, can make the stock market a bit shaky at first, but it makes it steadier over time.
How to use in your project
- 1.You can use this research to justify the long-term economic benefits of your design project, even if there are initial challenges.
- 2.Cite this study when discussing the market adoption and diffusion of your designed technology.
Add to My Project
Quick Cite
Paragraph starter
The implementation of digital technologies, such as increased online transaction ratios within industries like textiles, has been shown to exhibit a dual effect on capital market uncertainty. While initial adoption may lead to short-term volatility, a sustained integration of ICT ultimately contributes to long-term market stability, as evidenced by research in the Iranian context.
Source
Industria Textila
Investigating the effects of Information and Communication Technology (ICT)on capital market uncertainty by considering its impact on the textileindustry: a case study for Iran
journal · 2023
View sourceQuestions About This Research
- What does the research say about ict adoption in textile manufacturing can reduce capital market uncertainty over time?
- When introducing new digital technologies or systems, anticipate a period of increased market volatility followed by a stabilizing effect on capital markets. Evidence: Industria Textila (2023).
- Why does "ICT adoption in textile manufacturing can reduce capital market uncertainty over time." matter for design?
- This research highlights a temporal dynamic in the impact of technological adoption on market stability. For design and engineering professionals, understanding this lag effect is crucial when forecasting the broader economic implications of implementing new digital systems within their respective industries.
- How can designers apply this research?
- When introducing new digital technologies or systems, anticipate a period of increased market volatility followed by a stabilizing effect on capital markets.
- What were the main findings?
- In the short term, an increase in the ratio of online transactions to the total volume of transactions has increased capital market uncertainty.. In the long term, an increase in the ratio of online transactions to the total volume of transactions has reduced capital market uncertainty.. Inflation, economic growth, and exchange rate significantly affect the performance uncertainty of the total stock exchange index.. It takes approximately 7.5 quarters on average for imbalances in capital market uncertainty to be completely offset.
- What research method was used?
- Econometric modeling (ARDL and GARCH models).
- How strong is the evidence?
- Evidence strength is rated Moderate effect, based on a 2023 journal from Industria Textila.
- What should I do differently in my next project?
- When proposing or implementing digital transformation projects, include a risk assessment that accounts for potential short-term market uncertainty and a projection of long-term stability gains.
- What are the limitations?
- The study is specific to the Iranian textile industry and may not generalize to other sectors or economies. The chosen ICT indicator might not capture all facets of ICT adoption.