Does State Aid for Broadband Deployment in Rural Areas Close the Digital and Economic Divide?
Niklas S. Dürr,
Oliver Falck () and
Authors registered in the RePEc Author Service: Kai Hueschelrath
No 6947, CESifo Working Paper Series from CESifo Group Munich
We evaluate the impact of a major European state aid programme for broadband deployment applied to rural areas in the German state of Bavaria in the years 2010 and 2011. Using matched difference-in-differences estimation strategies, we find that aided municipalities have – depending on broadband quality – between 18.4 and 25.4 percentage points higher broadband coverage than non-aided municipalities. This increase in broadband coverage, closing the digital divide, results in an average increase of six employed individuals living in the respective aid-receiving municipalities while leaving the number of employed (measured at the place of work) or self-employed individuals and wages unaffected. We therefore conclude that an increase in broadband coverage through state aid protects rural areas from depopulation, but does not contribute to a further closing of the economic divide in the form of creating new jobs.
Keywords: : government policy; state aid; ex-post evaluation; broadband; employment; rural areas; European Union; Germany; Bavaria (search for similar items in EconPapers)
JEL-codes: D62 D73 G38 H23 J23 K23 L52 L96 L98 R23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur, nep-ict, nep-law, nep-lma, nep-pay and nep-reg
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Journal Article: Does state aid for broadband deployment in rural areas close the digital and economic divide? (2019)
Working Paper: Does state aid for broadband deployment in rural areas close the digital and economic divide? (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_6947
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