Broadband upgrade and firm performance in rural areas: Quasi-experimental evidence

Giulia Canzian, Samuele Poy () and Simone Schüller

Regional Science and Urban Economics, 2019, vol. 77, issue C, 87-103

Abstract: This paper analyzes the impact of advanced (up to 20 Mbps download, up to 1 Mbps upload) broadband accessibility on firm performance by exploiting a unique local policy of a staggered broadband infrastructure upgrade across rural municipalities. In a difference-in-differences framework based on longitudinal balance sheet data for limited companies, we show that ADSL2+ availability is associated with increases in firms’ revenue and total factor productivity (by on average 14.8 and 9.1 percent cumulatively over two years), but not with significant changes in personnel cost or employment. Additional analysis of aggregate administrative data shows no significant impact on the total number of active firms or local employment. Pre-trend evaluations support a causal interpretation.

Keywords: Broadband Internet; Firm performance; Quasi-natural experiment; Regional economic development; Infrastructure policy (search for similar items in EconPapers)
JEL-codes: J24 L25 O33 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:77:y:2019:i:c:p:87-103

DOI: 10.1016/j.regsciurbeco.2019.03.002

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