Broadband and Productivity: Structural Estimates for Germany

Tomaso Duso, Mattia Nardotto and Alexander Schiersch

No 1988, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: We study the impact of broadband availability on firms’ total factor productivity (TFP) using German firm-level data between 2010 and 2015. We adopt a control function approach to causally identify and separately estimate productivity for 46 two-digit manufacturing and service sectors. Over the sample period, broadband availability, measured by 16 Mbps transmission rates, more than doubled in German municipalities. While this increased broadband availability has almost no effect on firms’ productivity in manufacturing, it significantly increases TFP in most service sectors. Yet, the size of the effect is heterogenous across industries.

Keywords: broadband internet; productivity; firm-level data (search for similar items in EconPapers)
JEL-codes: D22 D24 J24 O14 O22 O33 (search for similar items in EconPapers)
Pages: 63 p.
Date: 2021
New Economics Papers: this item is included in nep-bec, nep-eff, nep-eur, nep-his, nep-ict and nep-lma
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