Ultra-fast broadband access and productivity: Evidence from Italian firms

Carlo Cambini, Elena Grinza and Lorien Sabatino

International Journal of Industrial Organization, 2023, vol. 86, issue C

Abstract: We study the impact of ultra-fast broadband (UFB) infrastructures on the total factor productivity (TFP) and labor productivity of firms. We use unique balanced panel data for the 2013–2019 period on incorporated firms in Italy. Using the geographical location of the firms, we merge firm-level data with municipality-level information on the diffusion of UFB, which started in 2015. We derive consistent firm-level TFP estimates by adopting a version of the Ackerberg et al.’s (2015) method, which also accounts for firm fixed effects. We then assess the impact of UFB on productivity and deal with the endogeneity of UFB by exploiting the physical distance between each municipality and the closest optical packet backbone node. Our results show an overall positive impact of UFB on productivity. Services companies benefit the most from advanced broadband technologies, as do firms located in the North-West and South of Italy. We further decompose the impact of full-fiber networks from mixed copper-fiber connections and find that the former significantly contribute to enhancing firm productivity. Finally, by exploiting Labor Force Survey data, we provide suggestive evidence that productivity increases from UFB might be related to structural changes at the workforce level.

Keywords: Ultra-fast broadband (UFB); Fiber-based networks; Fiber-to-the-home (FTTH); Total factor productivity (TFP); Labor productivity (search for similar items in EconPapers)
JEL-codes: D22 D24 L96 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Ultra-Fast Broadband Access and Productivity: Evidence from Italian Firms (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:86:y:2023:i:c:s0167718722000765

DOI: 10.1016/j.ijindorg.2022.102901

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