Does broadband infrastructure boost firm productivity? Evidence from a quasi-natural experiment in China

Liangliang Zhang, Yunqing Tao and Cong Nie

Finance Research Letters, 2022, vol. 48, issue C

Abstract: Broadband infrastructure underpins the development of the digital economy and has a significant impact on firm operations. However, the effect of broadband infrastructure on firm productivity have been rarely studied. By using the enforcement of the "Broadband China" strategy as an exogenous shock, this study investigated the effect of broadband infrastructure on firm productivity. A significant positive effect of broadband infrastructure on firm productivity was identified. It is further shown that information development, reallocation efficiency, innovation promotion and transaction cost reduction were four rational mechanisms through which broadband infrastructure enhances firm productivity. Finally, our findings were more pronounced for non-state-owned enterprises, highly capital-intensive firms and capital-strapped firms. Overall, this study provides insights into broadband infrastructure for enhancing firm productivity in developing countries.

Keywords: Broadband infrastructure; Firm productivity; “Broadband China” strategy (search for similar items in EconPapers)
JEL-codes: D24 H54 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:48:y:2022:i:c:s1544612322001647

DOI: 10.1016/j.frl.2022.102886

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